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Cintas Corporation (NAS:CTAS)
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 = 8 or 9
Bad or low score = 0 or 1

Cintas Corporation has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

CTAS' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 7

4
9

During the past 13 years, the highest Piotroski F-Score of Cintas Corporation 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 (Feb14) TTM:Last Year (Feb13) TTM:
Net Income was 84.602 + 84.862 + 77.754 + 85.977 = $333 Mil.
Cash Flow from Operations was 163.493 + 139.721 + 82.559 + 184.405 = $570 Mil.
Revenue was 1130.237 + 1143.753 + 1120.343 + 1129.086 = $4,523 Mil.
Gross Profit was 479.125 + 476.919 + 465.98 + 467.215 = $1,889 Mil.
Total Assets at the begining of this year (Feb13) was $4,221 Mil.
Total Assets was $4,400 Mil.
Long-Term Debt was $1,301 Mil.
Total Current Assets was $1,665 Mil.
Total Current Liabilities was $553 Mil.
Net Income was 74.705 + 78.027 + 76.733 + 0 = $229 Mil.

Revenue was 1075.674 + 1060.386 + 1051.325 + 0 = $3,187 Mil.
Gross Profit was 441.941 + 432.036 + 445.875 + 0 = $1,320 Mil.
Total Assets at the begining of last year (Feb12) was $4,253 Mil.
Total Assets was $4,221 Mil.
Long-Term Debt was $1,309 Mil.
Total Current Assets was $1,509 Mil.
Total Current Liabilities was $501 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.

Cintas Corporation's current net income was 333. ==> 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.

Cintas Corporation's current cash flow from operations was 570. ==> 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 (Feb13)
=333.195/4221.299
=0.07893186

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Feb12)
=229.465/4253.167
=0.05395156

Cintas Corporation's return on assets of this year was 0.07893186. Cintas Corporation's return on assets of last year was 0.05395156. ==> 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.

Cintas Corporation's current net income was 333. Cintas Corporation's current cash flow from operations was 570. ==> 570 > 333 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=1300.523/4400.441
=0.29554379

Gearing (Last Year)=Long-Term Debt/Total Assets
=1308.656/4221.299
=0.31001263

Cintas Corporation's gearing of this year was 0.29554379. Cintas Corporation's gearing of last year was 0.31001263. ==> This year is lower. ==> 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
=1664.909/552.802
=3.01176371

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1509.452/500.752
=3.01437039

Cintas Corporation's current ratio of this year was 3.01176371. Cintas Corporation's current ratio of last year was 3.01437039. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Cintas Corporation's number of shares in issue this year was 121.3. Cintas Corporation's number of shares in issue last year was 123.8. ==> There is the same number of shares in issue this year, or fewer. ==> Score 1.

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
=1889.239/4523.419
=0.41765731

Gross Margin (Last Year)=Gross Profit/Revenue
=1319.852/3187.385
=0.41408616

Cintas Corporation's gross margin of this year was 0.41765731. Cintas Corporation's gross margin of last year was 0.41408616. ==> 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 (Feb13)
=4523.419/4221.299
=1.07157039

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Feb12)
=3187.385/4253.167
=0.7494145

Cintas Corporation's asset turnover of this year was 1.07157039. Cintas Corporation's asset turnover of last year was 0.7494145. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+0+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Cintas Corporation 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.

Cintas Corporation Annual Data

May04May05May06May07May08May09May10May11May12May13
Q1 1111111111
Q2 1111111111
Q3 1010000111
Q4 1111111111
Q5 1100011010
Q6 1100110001
Q7 0111111111
Q8 1110101110
Q9 1110100101
F-score 8874766777

Cintas Corporation Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Q1 11111111
Q2 11111111
Q3 11000111
Q4 11111111
Q5 00000111
Q6 00111000
Q7 11111111
Q8 11000001
Q9 11000111
F-score 7776657770
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