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Educational Development Corp (NAS:EDUC)
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

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

EDUC' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 7

2
9

During the past 13 years, the highest Piotroski F-Score of Educational Development Corp 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 (May14) TTM:Last Year (May13) TTM:
Net Income was 0.056 + 0.548 + -0.313 + 0.24 = $0.53 Mil.
Cash Flow from Operations was -0.539 + 1.293 + 1.012 + -0.484 = $1.28 Mil.
Revenue was 5.715 + 8.502 + 5.889 + 7.178 = $27.28 Mil.
Gross Profit was 3.054 + 5.208 + 3.798 + 4.335 = $16.40 Mil.
Average Total Assets from the begining of this year (May13)
to the end of this year (May14) was
(17.041 + 17.846 + 18.337 + 16.758 + 17.882) / 5 = $17.57 Mil.
Total Assets was $17.88 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $15.24 Mil.
Total Current Liabilities was $5.34 Mil.
Net Income was 0.138 + 0.526 + -0.211 + 0.067 = $0.52 Mil.

Revenue was 5.464 + 7.864 + 5.564 + 5.991 = $24.88 Mil.
Gross Profit was 3.024 + 4.813 + 3.037 + 3.514 = $14.39 Mil.
Average Total Assets from the begining of last year (May12)
to the end of last year (May13) was
(18.52 + 18.967 + 18.911 + 17.901 + 17.041) / 5 = $18.27 Mil.
Total Assets was $17.04 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $13.85 Mil.
Total Current Liabilities was $3.80 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Educational Development Corp's current net income (ttm) was 0.53. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Educational Development Corp's current cash flow from operations (ttm) was 1.28. ==> 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 (TTM)/Average Total Assets from May13 to May14
=0.531/17.5728
=0.03021715

ROA (Last Year)=Net Income (TTM)/Average Total Assets from May12 to May13
=0.52/18.268
=0.02846508

Educational Development Corp's return on assets of this year was 0.03021715. Educational Development Corp's return on assets of last year was 0.02846508. ==> 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.

Educational Development Corp's current net income (ttm) was 0.53. Educational Development Corp's current cash flow from operations (ttm) was 1.28. ==> 1.28 > 0.53 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: May14)=Long-Term Debt/Total Assets
=0/17.882
=0

Gearing (Last Year: May13)=Long-Term Debt/Total Assets
=0/17.041
=0

Educational Development Corp's gearing of this year was 0. Educational Development Corp's gearing of last year was 0. ==> This year is lower or equal to last year. ==> 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: May14)=Total Current Assets/Total Current Liabilities
=15.241/5.341
=2.85358547

Current Ratio (Last Year: May13)=Total Current Assets/Total Current Liabilities
=13.852/3.799
=3.64622269

Educational Development Corp's current ratio of this year was 2.85358547. Educational Development Corp's current ratio of last year was 3.64622269. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Educational Development Corp's number of shares in issue this year was 4. Educational Development Corp's number of shares in issue last year was 4. ==> There is smaller number of shares in issue this year, or the same. ==> 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: TTM)=Gross Profit/Revenue
=16.395/27.284
=0.60090163

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=14.388/24.883
=0.5782261

Educational Development Corp's gross margin of this year was 0.60090163. Educational Development Corp's gross margin of last year was 0.5782261. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from May13 to May14
=27.284/17.5728
=1.55262679

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from May12 to May13
=24.883/18.268
=1.36210861

Educational Development Corp's asset turnover of this year was 1.55262679. Educational Development Corp's asset turnover of last year was 1.36210861. ==> 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

Educational Development Corp 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, Altman Z-Score, Beneish M-Score


Historical Data

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

Educational Development Corp Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Q1 1111111111
Q2 1111111111
Q3 0010010100
Q4 1011101001
Q5 1111011111
Q6 0111000101
Q7 1111100000
Q8 1011000001
Q9 0001000111
F-score 6588444647

Educational Development Corp Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Q1 1111111111
Q2 1111111111
Q3 1111000001
Q4 0000011111
Q5 1111111111
Q6 1000010010
Q7 0000000000
Q8 0000000011
Q9 0111000111
F-score 5555354577
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