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GuruFocus has detected 4 Warning Signs with Copart Inc $CPRT.
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Copart Inc (NAS:CPRT)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

Copart Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

CPRT' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 7

4
9

During the past 13 years, the highest Piotroski F-Score of Copart Inc 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 local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Net Income was 74.016 + 84.968 + 167.28 + 66.066 = $392 Mil.
Cash Flow from Operations was 124.177 + 125 + 74.293 + 81.235 = $405 Mil.
Revenue was 347.246 + 332.659 + 345.991 + 349.532 = $1,375 Mil.
Gross Profit was 157.647 + 141.464 + 145.293 + 146.765 = $591 Mil.
Average Total Assets from the begining of this year (Jan16)
to the end of this year (Jan17) was
(1604.364 + 1624.135 + 1649.82 + 1770.396 + 1841.241) / 5 = $1697.9912 Mil.
Total Assets at the begining of this year (Jan16) was $1,604 Mil.
Long-Term Debt was $566 Mil.
Total Current Assets was $659 Mil.
Total Current Liabilities was $346 Mil.
Net Income was 57.563 + 57.412 + 52.61 + 59.004 = $227 Mil.

Revenue was 297.142 + 282.293 + 288.838 + 299.706 = $1,168 Mil.
Gross Profit was 127.417 + 118.784 + 120.861 + 124.614 = $492 Mil.
Average Total Assets from the begining of last year (Jan15)
to the end of last year (Jan16) was
(1952.071 + 2002.977 + 1798.66 + 1855.764 + 1604.364) / 5 = $1842.7672 Mil.
Total Assets at the begining of last year (Jan15) was $1,952 Mil.
Long-Term Debt was $577 Mil.
Total Current Assets was $507 Mil.
Total Current Liabilities was $265 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.

Copart Inc's current net income (TTM) was 392. ==> 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.

Copart Inc's current cash flow from operations (TTM) was 405. ==> 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 (Jan16)
=392.33/1604.364
=0.24453927

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan15)
=226.589/1952.071
=0.11607621

Copart Inc's return on assets of this year was 0.24453927. Copart Inc's return on assets of last year was 0.11607621. ==> 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.

Copart Inc's current net income (TTM) was 392. Copart Inc's current cash flow from operations (TTM) was 405. ==> 405 > 392 ==> 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: Jan17)=Long-Term Debt/Average Total Assets from Jan16 to Jan17
=565.926/1697.9912
=0.33329148

Gearing (Last Year: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=576.501/1842.7672
=0.31284527

Copart Inc's gearing of this year was 0.33329148. Copart Inc's gearing of last year was 0.31284527. ==> 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: Jan17)=Total Current Assets/Total Current Liabilities
=659.252/345.947
=1.90564451

Current Ratio (Last Year: Jan16)=Total Current Assets/Total Current Liabilities
=506.858/265.117
=1.91182761

Copart Inc's current ratio of this year was 1.90564451. Copart Inc's current ratio of last year was 1.91182761. ==> 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.

Copart Inc's number of shares in issue this year was 117.8. Copart Inc's number of shares in issue last year was 124.6. ==> 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
=591.169/1375.428
=0.4298073

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=491.676/1167.979
=0.42096305

Copart Inc's gross margin of this year was 0.4298073. Copart Inc's gross margin of last year was 0.42096305. ==> 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 (Jan16)
=1375.428/1604.364
=0.8573042

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan15)
=1167.979/1952.071
=0.59832813

Copart Inc's asset turnover of this year was 0.8573042. Copart Inc's asset turnover of last year was 0.59832813. ==> 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+1+1
=7

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

Copart Inc has an F-score of 7. 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 local exchange's currency.

Copart Inc Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
Question 1 1111111111
Question 2 1111111111
Question 3 1100010011
Question 4 1111111111
Question 5 1110001101
Question 6 0011010110
Question 7 0110111001
Question 8 1011010111
Question 9 0110011000
F-score 6785486667

Copart Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Question 1 1111111111
Question 2 1111111111
Question 3 0011100111
Question 4 1111111101
Question 5 1000010100
Question 6 1111100000
Question 7 0000111111
Question 8 1111111111
Question 9 0000000001
F-score 6566765757
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