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Cintas Corp (NAS:CTAS)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

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

CTAS' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 6

4
9

During the past 13 years, the highest Piotroski F-Score of Cintas 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 (Nov15) TTM:Last Year (Nov14) TTM:
Net Income was 94.883 + 105.215 + 100.181 + 345.1 = $645 Mil.
Cash Flow from Operations was 85.073 + 202.63 + 143.083 + 121.954 = $553 Mil.
Revenue was 1108.847 + 1142.583 + 1198.89 + 1219.08 = $4,669 Mil.
Gross Profit was 475.307 + 486.66 + 524.144 + 527.4 = $2,014 Mil.
Average Total Assets from the begining of this year (Nov14)
to the end of this year (Nov15) was
(4697.571 + 4266.346 + 4192.46 + 4122.949 + 4450.792) / 5 = $4346.0236 Mil.
Total Assets at the begining of this year (Nov14) was $4,698 Mil.
Long-Term Debt was $1,050 Mil.
Total Current Assets was $2,043 Mil.
Total Current Liabilities was $1,131 Mil.
Net Income was 84.602 + 127.224 + 110.108 + 120.412 = $442 Mil.

Revenue was 1110.973 + 1134.415 + 1102.077 + 1123.379 = $4,471 Mil.
Gross Profit was 469.634 + 480.846 + 477.946 + 481.424 = $1,910 Mil.
Average Total Assets from the begining of last year (Nov13)
to the end of last year (Nov14) was
(4365.398 + 4400.441 + 4462.452 + 4556.27 + 4697.571) / 5 = $4496.4264 Mil.
Total Assets at the begining of last year (Nov13) was $4,365 Mil.
Long-Term Debt was $1,300 Mil.
Total Current Assets was $2,146 Mil.
Total Current Liabilities was $852 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.

Cintas Corp's current net income (TTM) was 645. ==> 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.

Cintas Corp's current cash flow from operations (TTM) was 553. ==> 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 (Nov14)
=645.379/4697.571
=0.13738568

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Nov13)
=442.346/4365.398
=0.10133005

Cintas Corp's return on assets of this year was 0.13738568. Cintas Corp's return on assets of last year was 0.10133005. ==> 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.

Cintas Corp's current net income (TTM) was 645. Cintas Corp's current cash flow from operations (TTM) was 553. ==> 553 <= 645 ==> CFROA <= ROA ==> Score 0.

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: Nov15)=Long-Term Debt/Average Total Assets from Nov14 to Nov15
=1050/4346.0236
=0.24160016

Gearing (Last Year: Nov14)=Long-Term Debt/Average Total Assets from Nov13 to Nov14
=1300/4496.4264
=0.28911849

Cintas Corp's gearing of this year was 0.24160016. Cintas Corp's gearing of last year was 0.28911849. ==> This year is lower or equal to last year. ==> Score 1.

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: Nov15)=Total Current Assets/Total Current Liabilities
=2043.28/1130.981
=1.80664397

Current Ratio (Last Year: Nov14)=Total Current Assets/Total Current Liabilities
=2145.98/851.764
=2.51945375

Cintas Corp's current ratio of this year was 1.80664397. Cintas Corp's current ratio of last year was 2.51945375. ==> 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.

Cintas Corp's number of shares in issue this year was 110.1. Cintas Corp's number of shares in issue last year was 118.7. ==> 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
=2013.511/4669.4
=0.43121407

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1909.85/4470.844
=0.42717885

Cintas Corp's gross margin of this year was 0.43121407. Cintas Corp's gross margin of last year was 0.42717885. ==> 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 (Nov14)
=4669.4/4697.571
=0.99400307

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Nov13)
=4470.844/4365.398
=1.02415496

Cintas Corp's asset turnover of this year was 0.99400307. Cintas Corp's asset turnover of last year was 1.02415496. ==> Last year's asset turnover is higher ==> Score 0.

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+0+1+0+1+1+0
=6

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

Cintas 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Cintas Corp Annual Data

May06May07May08May09May10May11May12May13May14May15
Question 1 1111111111
Question 2 1111111111
Question 3 1000011111
Question 4 1111111111
Question 5 0001101011
Question 6 0011000100
Question 7 1111111111
Question 8 1010111011
Question 9 1010010100
F-score 7476677777

Cintas Corp Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
Question 1 1111111111
Question 2 1111111111
Question 3 1111111101
Question 4 1111111110
Question 5 1111111111
Question 6 0000100000
Question 7 1111111111
Question 8 0011111111
Question 9 1110000000
F-score 7787877766
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