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Conn's, Inc. (NAS:CONN)
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

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

CONN' s 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 5

3
7

During the past 13 years, the highest Piotroski F-Score of Conn's, Inc. was 7. The lowest was 3. And the median was 5.


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 (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was 27.735 + 24.376 + 19.162 + 22.176 = $93 Mil.
Cash Flow from Operations was -100.563 + -70.511 + -32.675 + -6.513 = $-210 Mil.
Revenue was 361.141 + 310.876 + 270.689 + 251.063 = $1,194 Mil.
Gross Profit was 182.587 + 157.603 + 133.331 + 126.2 = $600 Mil.
Total Assets at the begining of this year (Jan13) was $910 Mil.
Total Assets was $1,298 Mil.
Long-Term Debt was $536 Mil.
Total Current Assets was $736 Mil.
Total Current Liabilities was $143 Mil.
Net Income was 17.665 + 11.785 + 11.606 + 11.556 = $53 Mil.

Revenue was 250.344 + 206.401 + 207.436 + 200.851 = $865 Mil.
Gross Profit was 119.251 + 99.191 + 95.085 + 90.858 = $404 Mil.
Total Assets at the begining of last year (Jan12) was $783 Mil.
Total Assets was $910 Mil.
Long-Term Debt was $263 Mil.
Total Current Assets was $528 Mil.
Total Current Liabilities was $151 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.

Conn's, Inc.'s current net income was 93. ==> Positive ==> Score 1.

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.

Conn's, Inc.'s current cash flow from operations was -210. ==> Negative ==> Score 0.

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 (Jan13)
=93.449/909.857
=0.10270735

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=52.612/783.298
=0.06716728

Conn's, Inc.'s return on assets of this year was 0.10270735. Conn's, Inc.'s return on assets of last year was 0.06716728. ==> 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.

Conn's, Inc.'s current net income was 93. Conn's, Inc.'s current cash flow from operations was -210. ==> -210 =< 93 ==> CFROA =< ROA ==> Score 0.

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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=535.631/1297.986
=0.41266316

Gearing (Last Year)=Long-Term Debt/Total Assets
=262.531/909.857
=0.28854095

Conn's, Inc.'s gearing of this year was 0.41266316. Conn's, Inc.'s gearing of last year was 0.28854095. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=735.595/142.607
=5.158197

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=528.244/151.163
=3.49453239

Conn's, Inc.'s current ratio of this year was 5.158197. Conn's, Inc.'s current ratio of last year was 3.49453239. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Conn's, Inc.'s number of shares in issue this year was 37.1. Conn's, Inc.'s number of shares in issue last year was 35.5. ==> There is more 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
=599.721/1193.769
=0.50237609

Gross Margin (Last Year)=Gross Profit/Revenue
=404.385/865.032
=0.46747982

Conn's, Inc.'s gross margin of this year was 0.50237609. Conn's, Inc.'s gross margin of last year was 0.46747982. ==> 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 (Jan13)
=1193.769/909.857
=1.31204024

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=865.032/783.298
=1.10434598

Conn's, Inc.'s asset turnover of this year was 1.31204024. Conn's, Inc.'s asset turnover of last year was 1.10434598. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Conn's, 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.

Conn's, Inc. Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 111110011
Q2 110011100
Q3 100000011
Q4 100011100
Q5 101000110
Q6 011001101
Q7 001100000
Q8 101011111
Q9 100100111
F-score 735344655

Conn's, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 0011111111
Q2 1111100000
Q3 0011111111
Q4 1110000000
Q5 1111110000
Q6 0100001111
Q7 0000000000
Q8 1111111111
Q9 0111111111
F-score 4676655555
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