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Amcon Distributing Company (AMEX:DIT)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Amcon Distributing Company has an F-score of 3 indicating the company's financial situation is typical for a stable company.

DIT' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 3

2
9

During the past 13 years, the highest Piotroski F-Score of Amcon Distributing Company was 9. The lowest was 2. 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 (Dec13) TTM:Last Year (Mar13) TTM:
Net Income was 1.288 + 1.55 + 1.632 + 1.288 = $6 Mil.
Cash Flow from Operations was -10.404 + 14.043 + -9.413 + -10.404 = $-16 Mil.
Revenue was 305.626 + 318.235 + 316.031 + 305.626 = $1,246 Mil.
Gross Profit was 19.641 + 20.02 + 19.811 + 19.641 = $79 Mil.
Total Assets at the begining of this year (Mar13) was $103 Mil.
Total Assets was $117 Mil.
Long-Term Debt was $33 Mil.
Total Current Assets was $92 Mil.
Total Current Liabilities was $25 Mil.
Net Income was 1.214 + 1.463 + 2.618 + 1.846 = $7 Mil.

Revenue was 274.568 + 302.218 + 307.663 + 307.113 = $1,192 Mil.
Gross Profit was 18.297 + 19.23 + 21.307 + 19.901 = $79 Mil.
Total Assets at the begining of last year (Mar12) was $103 Mil.
Total Assets was $103 Mil.
Long-Term Debt was $22 Mil.
Total Current Assets was $78 Mil.
Total Current Liabilities was $24 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.

Amcon Distributing Company's current net income was 6. ==> 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.

Amcon Distributing Company's current cash flow from operations was -16. ==> 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 (Mar13)
=5.758/103.433
=0.05566889

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=7.141/102.984
=0.06934087

Amcon Distributing Company's return on assets of this year was 0.05566889. Amcon Distributing Company's return on assets of last year was 0.06934087. ==> 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.

Amcon Distributing Company's current net income was 6. Amcon Distributing Company's current cash flow from operations was -16. ==> -16 =< 6 ==> 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
=32.742/116.916
=0.28004721

Gearing (Last Year)=Long-Term Debt/Total Assets
=22.2/103.433
=0.21463169

Amcon Distributing Company's gearing of this year was 0.28004721. Amcon Distributing Company's gearing of last year was 0.21463169. ==> 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
=91.876/24.593
=3.7358598

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=78.464/24.313
=3.22724468

Amcon Distributing Company's current ratio of this year was 3.7358598. Amcon Distributing Company's current ratio of last year was 3.22724468. ==> 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.

Amcon Distributing Company's number of shares in issue this year was 0.7. Amcon Distributing Company's number of shares in issue last year was 0.7. ==> 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
=79.113/1245.518
=0.06351815

Gross Margin (Last Year)=Gross Profit/Revenue
=78.735/1191.562
=0.06607713

Amcon Distributing Company's gross margin of this year was 0.06351815. Amcon Distributing Company's gross margin of last year was 0.06607713. ==> Last year's gross margin is higher ==> Score 0.

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 (Mar13)
=1245.518/103.433
=12.0417855

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=1191.562/102.984
=11.57036044

Amcon Distributing Company's asset turnover of this year was 12.0417855. Amcon Distributing Company's asset turnover of last year was 11.57036044. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+0+0+0+0+1+0+0+1
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Amcon Distributing Company has an F-score of 3 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.

Amcon Distributing Company Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Q1 0001111111
Q2 0101111111
Q3 0011110000
Q4 1111011110
Q5 1011111111
Q6 0101101111
Q7 0100111001
Q8 0101000100
Q9 1010111001
F-score 3547777656

Amcon Distributing Company Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13May13Jun13Sep13Dec13
Q1 111111111
Q2 111111010
Q3 000000000
Q4 011101010
Q5 001111010
Q6 111111101
Q7 000011110
Q8 000000000
Q9 110000101
F-score 4555560453
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