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Cantel Medical Corp (NYSE:CMN)
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

Cantel Medical Corp has an F-score of 6 indicating the company's financial situation is typical for a stable company.

CMN' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 6

4
9

During the past 13 years, the highest Piotroski F-Score of Cantel Medical Corp was 9. The lowest was 4. 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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was 11.185 + 11.126 + 10.249 + 10.705 = $43.3 Mil.
Cash Flow from Operations was 10.751 + 10.798 + 19.178 + 23.545 = $64.3 Mil.
Revenue was 118.272 + 119.042 + 120.058 + 131.377 = $488.7 Mil.
Gross Profit was 51.499 + 52.335 + 52.418 + 57.047 = $213.3 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(487.671 + 485.818 + 493.185 + 497.875 + 536.145) / 5 = $500.1 Mil.
Total Assets as of Jul13 was $487.7 Mil.
Long-Term Debt was $80.5 Mil.
Total Current Assets was $163.9 Mil.
Total Current Liabilities was $66.5 Mil.
Net Income was 9.576 + 10.452 + 8.998 + 10.213 = $39.2 Mil.

Revenue was 99.681 + 106.363 + 105.009 + 113.973 = $425.0 Mil.
Gross Profit was 43.727 + 45.151 + 45.484 + 49.114 = $183.5 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(434.812 + 431.474 + 471.858 + 484.364 + 487.671) / 5 = $462.0 Mil.
Total Assets as of Jul12 was $434.8 Mil.
Long-Term Debt was $85.0 Mil.
Total Current Assets was $150.7 Mil.
Total Current Liabilities was $59.2 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.

Cantel Medical Corp's current net income (ttm) was 43.3. ==> 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.

Cantel Medical Corp's current cash flow from operations (ttm) was 64.3. ==> 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 (Jul13)
=43.265/487.671
=0.0887176

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jul12)
=39.239/434.812
=0.0902436

Cantel Medical Corp's return on assets of this year was 0.0887176. Cantel Medical Corp's return on assets of last year was 0.0902436. ==> Last year is higher ==> Score 0.

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.

Cantel Medical Corp's current net income (ttm) was 43.3. Cantel Medical Corp's current cash flow from operations (ttm) was 64.3. ==> 64.3 > 43.3 ==> 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: Jul14)=Long-Term Debt/Average Total Assets from Jul13 to Jul14
=80.5/500.1388
=0.16095532

Gearing (Last Year: Jul13)=Long-Term Debt/Average Total Assets from Jul12 to Jul13
=85/462.0358
=0.18396843

Cantel Medical Corp's gearing of this year was 0.16095532. Cantel Medical Corp's gearing of last year was 0.18396843. ==> 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: Jul14)=Total Current Assets/Total Current Liabilities
=163.909/66.499
=2.46483406

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=150.66/59.151
=2.54704062

Cantel Medical Corp's current ratio of this year was 2.46483406. Cantel Medical Corp's current ratio of last year was 2.54704062. ==> 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.

Cantel Medical Corp's number of shares in issue this year was 41. Cantel Medical Corp's number of shares in issue last year was 40.7. ==> 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
=213.299/488.749
=0.43641828

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=183.476/425.026
=0.43168183

Cantel Medical Corp's gross margin of this year was 0.43641828. Cantel Medical Corp's gross margin of last year was 0.43168183. ==> This year's gross margin is higher. ==> Score 1.

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 (Jul13)
=488.749/487.671
=1.00221051

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jul12)
=425.026/434.812
=0.97749372

Cantel Medical Corp's asset turnover of this year was 1.00221051. Cantel Medical Corp's asset turnover of last year was 0.97749372. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Cantel Medical Corp 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.

Cantel Medical Corp Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
Q1 1111111111
Q2 1111111111
Q3 1100111100
Q4 1001111111
Q5 1001110011
Q6 0011111010
Q7 0000000000
Q8 1010110111
Q9 0101011101
F-score 6446786666

Cantel Medical Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1111111111
Q2 1111111111
Q3 1111101000
Q4 1111111111
Q5 0011111111
Q6 1011111110
Q7 0000000000
Q8 1111110111
Q9 1100001111
F-score 7677767776
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