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Dick's Sporting Goods, Inc. (NYSE:DKS)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

Dick's Sporting Goods, Inc. has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

DKS' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 8

4
8

During the past 13 years, the highest Piotroski F-Score of Dick's Sporting Goods, Inc. was 8. 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 (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was 138.637 + 49.977 + 84.163 + 64.821 = $338 Mil.
Cash Flow from Operations was 461.573 + -63.109 + 80.758 + -75.352 = $404 Mil.
Revenue was 1947.418 + 1400.623 + 1531.431 + 1333.701 = $6,213 Mil.
Gross Profit was 628.067 + 424.899 + 479.33 + 411.654 = $1,944 Mil.
Total Assets at the begining of this year (Jan13) was $2,888 Mil.
Total Assets was $3,071 Mil.
Long-Term Debt was $6 Mil.
Total Current Assets was $1,620 Mil.
Total Current Liabilities was $1,003 Mil.
Net Income was 129.75 + 50.139 + 53.663 + 57.157 = $291 Mil.

Revenue was 1805.301 + 1312.072 + 1437.041 + 1281.704 = $5,836 Mil.
Gross Profit was 588.651 + 406.124 + 447.78 + 394.607 = $1,837 Mil.
Total Assets at the begining of last year (Jan12) was $2,996 Mil.
Total Assets was $2,888 Mil.
Long-Term Debt was $8 Mil.
Total Current Assets was $1,596 Mil.
Total Current Liabilities was $1,001 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.

Dick's Sporting Goods, Inc.'s current net income was 338. ==> 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.

Dick's Sporting Goods, Inc.'s current cash flow from operations was 404. ==> 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 (Jan13)
=337.598/2887.807
=0.11690463

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=290.709/2996.452
=0.09701774

Dick's Sporting Goods, Inc.'s return on assets of this year was 0.11690463. Dick's Sporting Goods, Inc.'s return on assets of last year was 0.09701774. ==> 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.

Dick's Sporting Goods, Inc.'s current net income was 338. Dick's Sporting Goods, Inc.'s current cash flow from operations was 404. ==> 404 > 338 ==> 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
=6.476/3071.487
=0.00210843

Gearing (Last Year)=Long-Term Debt/Total Assets
=7.762/2887.807
=0.00268785

Dick's Sporting Goods, Inc.'s gearing of this year was 0.00210843. Dick's Sporting Goods, Inc.'s gearing of last year was 0.00268785. ==> 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
=1620.071/1002.587
=1.61589069

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1595.889/1000.768
=1.5946643

Dick's Sporting Goods, Inc.'s current ratio of this year was 1.61589069. Dick's Sporting Goods, Inc.'s current ratio of last year was 1.5946643. ==> 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.

Dick's Sporting Goods, Inc.'s number of shares in issue this year was 125.2. Dick's Sporting Goods, Inc.'s number of shares in issue last year was 126.5. ==> 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
=1943.95/6213.173
=0.31287556

Gross Margin (Last Year)=Gross Profit/Revenue
=1837.162/5836.118
=0.31479178

Dick's Sporting Goods, Inc.'s gross margin of this year was 0.31287556. Dick's Sporting Goods, Inc.'s gross margin of last year was 0.31479178. ==> 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 (Jan13)
=6213.173/2887.807
=2.15151947

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=5836.118/2996.452
=1.94767612

Dick's Sporting Goods, Inc.'s asset turnover of this year was 2.15151947. Dick's Sporting Goods, Inc.'s asset turnover of last year was 1.94767612. ==> 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+1+1+0+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Dick's Sporting Goods, Inc. 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.

Dick's Sporting Goods, Inc. Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111011111
Q2 1111111111
Q3 0011011101
Q4 1111111111
Q5 0111011111
Q6 0010101101
Q7 0000100001
Q8 1111001110
Q9 1010010001
F-score 5586467758

Dick's Sporting Goods, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 1111111111
Q2 1111111111
Q3 1111000111
Q4 1111111101
Q5 1111111101
Q6 1100000001
Q7 0001001011
Q8 1111111110
Q9 0000000111
F-score 7767556768
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