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Best Buy Co Inc (NYSE:BBY)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Best Buy Co Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

BBY' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Best Buy Co Inc was 9. The lowest was 3. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Net Income was 461 + 293 + 54 + 266 = $1,074 Mil.
Cash Flow from Operations was 308 + 770 + 305 + 24 = $1,407 Mil.
Revenue was 9035 + 14368 + 9362 + 9300 = $42,065 Mil.
Gross Profit was 2020 + 2881 + 2170 + 2469 = $9,540 Mil.
Total Assets at the begining of this year (Apr13) was $14,331 Mil.
Total Assets was $13,911 Mil.
Long-Term Debt was $1,604 Mil.
Total Current Assets was $10,118 Mil.
Total Current Liabilities was $6,880 Mil.
Net Income was -81 + -10 + 12 + 158 = $79 Mil.

Revenue was 9347 + 9381 + 10547 + 11610 = $40,885 Mil.
Gross Profit was 2158 + 2228 + 2564 + 2907 = $9,857 Mil.
Total Assets at the begining of last year (Feb12) was $16,005 Mil.
Total Assets was $14,331 Mil.
Long-Term Debt was $1,142 Mil.
Total Current Assets was $10,006 Mil.
Total Current Liabilities was $8,561 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Best Buy Co Inc's current net income was 1,074. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Best Buy Co Inc's current cash flow from operations was 1,407. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Apr13)
=1074/14331
=0.07494243

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Feb12)
=79/16005
=0.00493596

Best Buy Co Inc's return on assets of this year was 0.07494243. Best Buy Co Inc's return on assets of last year was 0.00493596. ==> This year is higher. ==> Score 1.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Best Buy Co Inc's current net income was 1,074. Best Buy Co Inc's current cash flow from operations was 1,407. ==> 1,407 > 1,074 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=1604/13911
=0.11530444

Gearing (Last Year)=Long-Term Debt/Total Assets
=1142/14331
=0.07968739

Best Buy Co Inc's gearing of this year was 0.11530444. Best Buy Co Inc's gearing of last year was 0.07968739. ==> Last year is lower ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year)=Total Current Assets/Total Current Liabilities
=10118/6880
=1.47063953

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=10006/8561
=1.16878869

Best Buy Co Inc's current ratio of this year was 1.47063953. Best Buy Co Inc's current ratio of last year was 1.16878869. ==> This year's current ratio is higher. ==> Score 1.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Best Buy Co Inc's number of shares in issue this year was 350.4. Best Buy Co Inc's number of shares in issue last year was 341. ==> There is more number of shares in issue this year. ==> Score 0.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year)=Gross Profit/Revenue
=9540/42065
=0.22679187

Gross Margin (Last Year)=Gross Profit/Revenue
=9857/40885
=0.24109086

Best Buy Co Inc's gross margin of this year was 0.22679187. Best Buy Co Inc's gross margin of last year was 0.24109086. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue/Total Assets at the beginning of this year (Apr13)
=42065/14331
=2.93524527

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Feb12)
=40885/16005
=2.55451421

Best Buy Co Inc's asset turnover of this year was 2.93524527. Best Buy Co Inc's asset turnover of last year was 2.55451421. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+0+0+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Best Buy Co Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Best Buy Co Inc Annual Data

Feb04Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Jan14
Q1 1111111101
Q2 1111111111
Q3 1101001001
Q4 1111111011
Q5 1110001100
Q6 0101001101
Q7 0101110111
Q8 1010011100
Q9 1001010010
F-score 7757467646

Best Buy Co Inc Quarterly Data

Nov11Feb12Apr12Jul12Oct12Apr13Jul13Oct13Jan14Apr14
Q1 1000011111
Q2 1111100111
Q3 0000011111
Q4 1111100111
Q5 0001110000
Q6 1000011111
Q7 1111110000
Q8 0000000000
Q9 0100000011
F-score 5434453566
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