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Epiq Systems Inc (NAS:EPIQ)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

Epiq Systems Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

EPIQ' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 5

3
8

During the past 13 years, the highest Piotroski F-Score of Epiq Systems Inc was 8. The lowest was 3. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was -3.419 + -2.298 + 0.096 + 4.235 = $-1.4 Mil.
Cash Flow from Operations was 19.601 + -0.831 + 24.006 + 23.961 = $66.7 Mil.
Revenue was 125.056 + 123.271 + 129.437 + 115.684 = $493.4 Mil.
Gross Profit was 58.089 + 58.833 + 64.542 + 57.993 = $239.5 Mil.
Total Assets at the begining of this year (Jun13) was $690.9 Mil.
Total Assets was $723.8 Mil.
Long-Term Debt was $297.8 Mil.
Total Current Assets was $182.7 Mil.
Total Current Liabilities was $58.9 Mil.
Net Income was 2.842 + 3.937 + 3.965 + 11.266 = $22.0 Mil.

Revenue was 113.372 + 123.59 + 95.731 + 90.987 = $423.7 Mil.
Gross Profit was 55.772 + 51.552 + 50.28 + 49.75 = $207.4 Mil.
Total Assets at the begining of last year (Jun12) was $670.0 Mil.
Total Assets was $690.9 Mil.
Long-Term Debt was $240.8 Mil.
Total Current Assets was $160.5 Mil.
Total Current Liabilities was $60.1 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.

Epiq Systems Inc's current net income was -1.4. ==> Negative ==> Score 0.

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.

Epiq Systems Inc's current cash flow from operations was 66.7. ==> 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 (Jun13)
=-1.386/690.899
=-0.00200608

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=22.01/669.957
=0.03285285

Epiq Systems Inc's return on assets of this year was -0.00200608. Epiq Systems Inc's return on assets of last year was 0.03285285. ==> 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.

Epiq Systems Inc's current net income was -1.4. Epiq Systems Inc's current cash flow from operations was 66.7. ==> 66.7 > -1.4 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=297.833/723.786
=0.41149318

Gearing (Last Year)=Long-Term Debt/Total Assets
=240.796/690.899
=0.34852562

Epiq Systems Inc's gearing of this year was 0.41149318. Epiq Systems Inc's gearing of last year was 0.34852562. ==> Last year is lower than this year ==> 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
=182.692/58.857
=3.10399783

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=160.543/60.071
=2.67255414

Epiq Systems Inc's current ratio of this year was 3.10399783. Epiq Systems Inc's current ratio of last year was 2.67255414. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Epiq Systems Inc's number of shares in issue this year was 35.4. Epiq Systems Inc's number of shares in issue last year was 36.9. ==> 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)=Gross Profit/Revenue
=239.457/493.448
=0.48527302

Gross Margin (Last Year)=Gross Profit/Revenue
=207.354/423.68
=0.48941182

Epiq Systems Inc's gross margin of this year was 0.48527302. Epiq Systems Inc's gross margin of last year was 0.48941182. ==> 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 (Jun13)
=493.448/690.899
=0.71421148

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=423.68/669.957
=0.6323988

Epiq Systems Inc's asset turnover of this year was 0.71421148. Epiq Systems Inc's asset turnover of last year was 0.6323988. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+0+1+0+1+1+0+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Epiq Systems Inc has an F-score of 5 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.

Epiq Systems Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0011111111
Q2 1111111111
Q3 0110100010
Q4 1101111111
Q5 0011110010
Q6 0001001001
Q7 1001001111
Q8 0110011100
Q9 1010100101
F-score 4466656666

Epiq Systems Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111110
Q2 1111111111
Q3 0011110000
Q4 1111101111
Q5 0001100000
Q6 0010111111
Q7 1111000111
Q8 1000000010
Q9 1000011111
F-score 6466655675
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