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

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

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 8. It is a good or high score, which usually indicates a very healthy situation.

BKS' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 8

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 own currency.

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was -36.704 + -28.449 + 12.298 + 72.168 = $19 Mil.
Cash Flow from Operations was -129.66 + -139.032 + 193.629 + 197.156 = $122 Mil.
Revenue was 1321.906 + 1236.447 + 1687.82 + 1961.151 = $6,207 Mil.
Gross Profit was 424.351 + 382.692 + 459.888 + 628.037 = $1,895 Mil.
Average Total Assets from the begining of this year (Jan14)
to the end of this year (Jan15) was
(4141.177 + 3537.449 + 3748.654 + 3835.753 + 3876.243) / 5 = $3827.8552 Mil.
Total Assets at the begining of this year (Jan14) was $4,141 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $2,368 Mil.
Total Current Liabilities was $2,034 Mil.
Net Income was -114.796 + -87.022 + 13.229 + 63.23 = $-125 Mil.

Revenue was 1277.021 + 1329.502 + 1734.159 + 1995.79 = $6,336 Mil.
Gross Profit was 230.9 + 368.201 + 461.942 + 603.441 = $1,664 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(4340.294 + 3732.536 + 3927.214 + 4078.418 + 4141.177) / 5 = $4043.9278 Mil.
Total Assets at the begining of last year (Jan13) was $4,340 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $2,534 Mil.
Total Current Liabilities was $2,284 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 19. ==> 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 122. ==> 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 (Jan14)
=19.313/4141.177
=0.00466365

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=-125.359/4340.294
=-0.02888261

Barnes & Noble Inc's return on assets of this year was 0.00466365. Barnes & Noble Inc's return on assets of last year was -0.02888261. ==> 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 19. Barnes & Noble Inc's current cash flow from operations (TTM) was 122. ==> 122 > 19 ==> 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: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=0/3827.8552
=0

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=0/4043.9278
=0

Barnes & Noble Inc's gearing of this year was 0. Barnes & Noble Inc's gearing of last year was 0. ==> This year is lower or equal to last year. ==> Score 1.

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: Jan15)=Total Current Assets/Total Current Liabilities
=2367.598/2034.2
=1.16389637

Current Ratio (Last Year: Jan14)=Total Current Assets/Total Current Liabilities
=2534.256/2284.174
=1.10948465

Barnes & Noble Inc's current ratio of this year was 1.16389637. Barnes & Noble Inc's current ratio of last year was 1.10948465. ==> This year's current ratio is higher. ==> Score 1.

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 73.7. Barnes & Noble Inc's number of shares in issue last year was 71. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=1894.968/6207.324
=0.30527938

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1664.484/6336.472
=0.26268308

Barnes & Noble Inc's gross margin of this year was 0.30527938. Barnes & Noble Inc's gross margin of last year was 0.26268308. ==> This year's gross margin is higher. ==> Score 1.

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 (Jan14)
=6207.324/4141.177
=1.49892748

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=6336.472/4340.294
=1.45991769

Barnes & Noble Inc's asset turnover of this year was 1.49892748. Barnes & Noble Inc's asset turnover of last year was 1.45991769. ==> 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+1+1+0+1+1
=8

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

Barnes & Noble Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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.

Barnes & Noble Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14
Question 1 1111110000
Question 2 1111111011
Question 3 0110000101
Question 4 1111111111
Question 5 1111100011
Question 6 0010001110
Question 7 1111110000
Question 8 1110100101
Question 9 0111010100
F-score 6896653545

Barnes & Noble Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 0000000111
Question 2 1111111111
Question 3 1000001111
Question 4 1111111111
Question 5 0011111111
Question 6 1111000111
Question 7 0100000000
Question 8 1100001111
Question 9 0000000011
F-score 5544335788
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