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

The zones of discrimination were as such:

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

Barnes & Noble Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

BKS' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 5

3
9

During the past 13 years, the highest Piotroski F-Score of Barnes & Noble 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 -36.704 + 63.23 + 13.229 + -87.022 = $-47 Mil.
Cash Flow from Operations was -129.66 + 303.832 + 142.945 + 2.839 = $320 Mil.
Revenue was 1321.906 + 1995.79 + 1734.159 + 1329.502 = $6,381 Mil.
Gross Profit was 424.351 + 603.441 + 461.942 + 368.201 = $1,858 Mil.
Total Assets at the begining of this year (Apr13) was $3,733 Mil.
Total Assets was $3,537 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,980 Mil.
Total Current Liabilities was $1,722 Mil.
Net Income was -114.796 + -3.683 + 0.501 + -39.828 = $-158 Mil.

Revenue was 1277.021 + 2223.945 + 1884.532 + 1453.507 = $6,839 Mil.
Gross Profit was 230.9 + 553.512 + 482.289 + 415.805 = $1,683 Mil.
Total Assets at the begining of last year (Apr12) was $3,775 Mil.
Total Assets was $3,733 Mil.
Long-Term Debt was $77 Mil.
Total Current Assets was $2,047 Mil.
Total Current Liabilities was $1,715 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.

Barnes & Noble Inc's current net income was -47. ==> Negative ==> Score 0.

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.

Barnes & Noble Inc's current cash flow from operations was 320. ==> 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)
=-47.267/3732.536
=-0.01266351

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Apr12)
=-157.806/3774.699
=-0.04180625

Barnes & Noble Inc's return on assets of this year was -0.01266351. Barnes & Noble Inc's return on assets of last year was -0.04180625. ==> 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.

Barnes & Noble Inc's current net income was -47. Barnes & Noble Inc's current cash flow from operations was 320. ==> 320 > -47 ==> 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)=Long-Term Debt/Total Assets
=0/3537.449
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=77/3732.536
=0.02062941

Barnes & Noble Inc's gearing of this year was 0. Barnes & Noble Inc's gearing of last year was 0.02062941. ==> This year is lower or equal to last year. ==> Score 1.

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
=1980.438/1721.645
=1.15031728

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2047.135/1715.47
=1.19333769

Barnes & Noble Inc's current ratio of this year was 1.15031728. Barnes & Noble Inc's current ratio of last year was 1.19333769. ==> Last year's current ratio is higher ==> Score 0.

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.

Barnes & Noble Inc's number of shares in issue this year was 59.1. Barnes & Noble Inc's number of shares in issue last year was 58.5. ==> 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)=Gross Profit/Revenue
=1857.935/6381.357
=0.29115046

Gross Margin (Last Year)=Gross Profit/Revenue
=1682.506/6839.005
=0.2460162

Barnes & Noble Inc's gross margin of this year was 0.29115046. Barnes & Noble Inc's gross margin of last year was 0.2460162. ==> This year's gross margin is higher. ==> Score 1.

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)
=6381.357/3732.536
=1.70965719

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Apr12)
=6839.005/3774.699
=1.81180142

Barnes & Noble Inc's asset turnover of this year was 1.70965719. Barnes & Noble Inc's asset turnover of last year was 1.81180142. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+1+1+1+0+0+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Barnes & Noble Inc has an F-score of 5 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.

Barnes & Noble Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13Apr14
Q1 1111110000
Q2 1111111011
Q3 0110000101
Q4 1111111111
Q5 1111100011
Q6 0010001110
Q7 1111110000
Q8 1110100101
Q9 0111010100
F-score 6896653545

Barnes & Noble Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
Q1 0000000000
Q2 1011111111
Q3 0111000001
Q4 1111111111
Q5 1010011111
Q6 0101111000
Q7 0000100000
Q8 1111100001
Q9 0110000000
F-score 4565544335
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