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Dollar Tree Stores, Inc. (NAS:DLTR)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Dollar Tree Stores, Inc. has an F-score of 4 indicating the company's financial situation is typical for a stable company.

DLTR' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 4

3
9

During the past 13 years, the highest Piotroski F-Score of Dollar Tree Stores, Inc. was 9. The lowest was 3. And the median was 7.


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 213.1 + 125.4 + 124.7 + 133.5 = $597 Mil.
Cash Flow from Operations was 426.7 + 66.4 + 171 + 129.3 = $793 Mil.
Revenue was 2234.9 + 1884.7 + 1854.9 + 1865.8 = $7,840 Mil.
Gross Profit was 825.2 + 659.9 + 648.7 + 656 = $2,790 Mil.
Total Assets at the begining of this year (Jan13) was $2,752 Mil.
Total Assets was $2,772 Mil.
Long-Term Debt was $757 Mil.
Total Current Assets was $1,379 Mil.
Total Current Liabilities was $686 Mil.
Net Income was 228.6 + 155.4 + 119.2 + 116.1 = $619 Mil.

Revenue was 2245.8 + 1720.5 + 1704.6 + 1723.6 = $7,395 Mil.
Gross Profit was 850.8 + 599.6 + 599.6 + 602.7 = $2,653 Mil.
Total Assets at the begining of last year (Jan12) was $2,329 Mil.
Total Assets was $2,752 Mil.
Long-Term Debt was $257 Mil.
Total Current Assets was $1,474 Mil.
Total Current Liabilities was $676 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.

Dollar Tree Stores, Inc.'s current net income was 597. ==> 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.

Dollar Tree Stores, Inc.'s current cash flow from operations was 793. ==> 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)
=596.7/2752
=0.21682413

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=619.3/2328.6
=0.26595379

Dollar Tree Stores, Inc.'s return on assets of this year was 0.21682413. Dollar Tree Stores, Inc.'s return on assets of last year was 0.26595379. ==> 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.

Dollar Tree Stores, Inc.'s current net income was 597. Dollar Tree Stores, Inc.'s current cash flow from operations was 793. ==> 793 > 597 ==> 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
=757/2771.9
=0.27309788

Gearing (Last Year)=Long-Term Debt/Total Assets
=257/2752
=0.09338663

Dollar Tree Stores, Inc.'s gearing of this year was 0.27309788. Dollar Tree Stores, Inc.'s gearing of last year was 0.09338663. ==> 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
=1378.5/686.3
=2.00859682

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1473.5/676.2
=2.17908903

Dollar Tree Stores, Inc.'s current ratio of this year was 2.00859682. Dollar Tree Stores, Inc.'s current ratio of last year was 2.17908903. ==> 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.

Dollar Tree Stores, Inc.'s number of shares in issue this year was 209.2. Dollar Tree Stores, Inc.'s number of shares in issue last year was 227.4. ==> 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
=2789.8/7840.3
=0.35582822

Gross Margin (Last Year)=Gross Profit/Revenue
=2652.7/7394.5
=0.3587396

Dollar Tree Stores, Inc.'s gross margin of this year was 0.35582822. Dollar Tree Stores, Inc.'s gross margin of last year was 0.3587396. ==> 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)
=7840.3/2752
=2.84894622

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=7394.5/2328.6
=3.17551318

Dollar Tree Stores, Inc.'s asset turnover of this year was 2.84894622. Dollar Tree Stores, Inc.'s asset turnover of last year was 3.17551318. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+1+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Dollar Tree Stores, Inc. has an F-score of 4 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.

Dollar Tree Stores, Inc. Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 0011111110
Q4 1111111111
Q5 0110111010
Q6 1000110010
Q7 1111111111
Q8 0001010110
Q9 0011100110
F-score 5577886794

Dollar Tree Stores, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 1111111111
Q2 1111111111
Q3 1111111100
Q4 1111111111
Q5 1011110100
Q6 0000011100
Q7 1111111111
Q8 1100111110
Q9 1111111110
F-score 8777898964
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