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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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 293 + 461 + 146 + 107 = $1,007 Mil.
Cash Flow from Operations was 770 + 308 + 179 + 287 = $1,544 Mil.
Revenue was 14470 + 9035 + 8896 + 9380 = $41,781 Mil.
Gross Profit was 2917 + 2020 + 2055 + 2128 = $9,120 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(15068 + 14013 + 13911 + 14349 + 15762) / 5 = $14,621 Mil.
Total Assets as of Oct13 was $15,068 Mil.
Long-Term Debt was $1,591 Mil.
Total Current Assets was $12,063 Mil.
Total Current Liabilities was $8,626 Mil.
Net Income was -10 + -81 + 266 + 54 = $229 Mil.

Revenue was 9381 + 9347 + 9266 + 9362 = $37,356 Mil.
Gross Profit was 2228 + 2158 + 2458 + 2170 = $9,014 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Oct13) was
(15849 + 17556 + 14331 + 13284 + 15068) / 5 = $15,218 Mil.
Total Assets as of Jul12 was $15,849 Mil.
Long-Term Debt was $1,624 Mil.
Total Current Assets was $11,234 Mil.
Total Current Liabilities was $8,665 Mil.

Profitability

Q1. Return on Assets (ROA)

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

Score 1 if positive, 0 if negative.

Best Buy Co Inc's current net income (ttm) was 1,007. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

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

Score 1 if positive, 0 if negative.

Best Buy Co Inc's current cash flow from operations (ttm) was 1,544. ==> 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 (TTM)/Beginning of This Year Total Assets (Oct13)
=1007/15068
=0.06683037

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jul12)
=229/15849
=0.01444886

Best Buy Co Inc's return on assets of this year was 0.06683037. Best Buy Co Inc's return on assets of last year was 0.01444886. ==> 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 (ttm) was 1,007. Best Buy Co Inc's current cash flow from operations (ttm) was 1,544. ==> 1,544 > 1,007 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=1591/14620.6
=0.10881906

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Jul12 to Oct13
=1624/15217.6
=0.10671854

Best Buy Co Inc's gearing of this year was 0.10881906. Best Buy Co Inc's gearing of last year was 0.10671854. ==> Last year is lower than this year ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=12063/8626
=1.39844656

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=11234/8665
=1.29648009

Best Buy Co Inc's current ratio of this year was 1.39844656. Best Buy Co Inc's current ratio of last year was 1.29648009. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Best Buy Co Inc's number of shares in issue this year was 354. Best Buy Co Inc's number of shares in issue last year was 348.9. ==> There is larger 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: TTM)=Gross Profit/Revenue
=9120/41781
=0.21828104

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=9014/37356
=0.24129993

Best Buy Co Inc's gross margin of this year was 0.21828104. Best Buy Co Inc's gross margin of last year was 0.24129993. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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 (TTM)/Beginning of This Year Total Assets (Oct13)
=41781/15068
=2.77282984

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jul12)
=37356/15849
=2.35699413

Best Buy Co Inc's asset turnover of this year was 2.77282984. Best Buy Co Inc's asset turnover of last year was 2.35699413. ==> 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, Altman Z-Score, Beneish M-Score


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 0001110111
Q8 1010011100
Q9 1001010010
F-score 7657467646

Best Buy Co Inc Quarterly Data

Apr12Jul12Oct12Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 0001111111
Q2 1110011111
Q3 0001111111
Q4 1110011111
Q5 0111000000
Q6 0001111111
Q7 1111000000
Q8 0000000000
Q9 0000001111
F-score 3445356666
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