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Barnes & Noble Inc (NYSE:BKS)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Barnes & Noble Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

BKS' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 6

2
9

During the past 13 years, the highest Piotroski F-Score of Barnes & Noble Inc was 9. The lowest was 2. 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 local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Net Income was 80.262 + -30.608 + -14.416 + -20.409 = $15 Mil.
Cash Flow from Operations was 289.742 + -50.365 + 27.623 + -79.373 = $188 Mil.
Revenue was 1413.947 + 876.684 + 913.882 + 858.548 = $4,063 Mil.
Gross Profit was 491.655 + 265.758 + 277.539 + 255.375 = $1,290 Mil.
Average Total Assets from the begining of this year (Oct15)
to the end of this year (Oct16) was
(2447.726 + 2206.42 + 2012.782 + 2048.154 + 2257.763) / 5 = $2194.569 Mil.
Total Assets at the begining of this year (Oct15) was $2,448 Mil.
Long-Term Debt was $191 Mil.
Total Current Assets was $1,435 Mil.
Total Current Liabilities was $1,372 Mil.
Net Income was 72.168 + -19.421 + -34.874 + -39.226 = $-21 Mil.

Revenue was 1440.132 + 910.079 + 978.559 + 894.654 = $4,223 Mil.
Gross Profit was 505.784 + 299.807 + 300.098 + 269.786 = $1,375 Mil.
Average Total Assets from the begining of last year (Oct14)
to the end of last year (Oct15) was
(3835.753 + 3876.243 + 3112.431 + 3653.789 + 2447.726) / 5 = $3385.1884 Mil.
Total Assets at the begining of last year (Oct14) was $3,836 Mil.
Long-Term Debt was $192 Mil.
Total Current Assets was $1,582 Mil.
Total Current Liabilities was $1,386 Mil.

Profitability

Question 1. 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.

Barnes & Noble Inc's current net income (TTM) was 15. ==> Positive ==> Score 1.

Question 2. 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.

Barnes & Noble Inc's current cash flow from operations (TTM) was 188. ==> Positive ==> Score 1.

Question 3. 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)/Total Assets at the Beginning of This Year (Oct15)
=14.829/2447.726
=0.00605828

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct14)
=-21.353/3835.753
=-0.00556683

Barnes & Noble Inc's return on assets of this year was 0.00605828. Barnes & Noble Inc's return on assets of last year was -0.00556683. ==> This year is higher. ==> Score 1.

Question 4. 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.

Barnes & Noble Inc's current net income (TTM) was 15. Barnes & Noble Inc's current cash flow from operations (TTM) was 188. ==> 188 > 15 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. 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: Oct16)=Long-Term Debt/Average Total Assets from Oct15 to Oct16
=191.423/2194.569
=0.08722578

Gearing (Last Year: Oct15)=Long-Term Debt/Average Total Assets from Oct14 to Oct15
=192/3385.1884
=0.05671767

Barnes & Noble Inc's gearing of this year was 0.08722578. Barnes & Noble Inc's gearing of last year was 0.05671767. ==> Last year is lower than this year ==> Score 0.

Question 6. 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: Oct16)=Total Current Assets/Total Current Liabilities
=1435.335/1372.414
=1.04584695

Current Ratio (Last Year: Oct15)=Total Current Assets/Total Current Liabilities
=1582.005/1386.254
=1.14120861

Barnes & Noble Inc's current ratio of this year was 1.04584695. Barnes & Noble Inc's current ratio of last year was 1.14120861. ==> Last year's current ratio is higher ==> Score 0.

Question 7. 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.

Barnes & Noble Inc's number of shares in issue this year was 72.2. Barnes & Noble Inc's number of shares in issue last year was 75.6. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. 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
=1290.327/4063.061
=0.3175751

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1375.475/4223.424
=0.3256777

Barnes & Noble Inc's gross margin of this year was 0.3175751. Barnes & Noble Inc's gross margin of last year was 0.3256777. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year 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 (TTM)/Total Assets at the Beginning of This Year (Oct15)
=4063.061/2447.726
=1.65993293

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct14)
=4223.424/3835.753
=1.10106777

Barnes & Noble Inc's asset turnover of this year was 1.65993293. Barnes & Noble Inc's asset turnover of last year was 1.10106777. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+0+0+1+0+1
=6

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Barnes & Noble 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 local exchange's currency.

Barnes & Noble Inc Annual Data

Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
Question 1 1111000010
Question 2 1111101111
Question 3 1000000110
Question 4 1111111111
Question 5 1110001110
Question 6 1000111000
Question 7 1110000000
Question 8 1010010111
Question 9 1101010000
F-score 9664344563

Barnes & Noble Inc Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
Question 1 1111100001
Question 2 1111111111
Question 3 1111100001
Question 4 1111111111
Question 5 1111101000
Question 6 1110100000
Question 7 0010000001
Question 8 1111111110
Question 9 0100000001
F-score 7886734336
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