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Family Dollar Stores Inc (NYSE:FDO)
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

Family Dollar Stores Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

FDO' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Family Dollar Stores Inc was 9. 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 (May14) TTM:Last Year (May13) TTM:
Net Income was 102.213 + 78.027 + 168.896 + 81.147 = $430 Mil.
Cash Flow from Operations was 146.622 + 26.133 + 111.924 + 141.077 = $426 Mil.
Revenue was 2502.266 + 2499.691 + 5216.312 + 2658.964 = $12,877 Mil.
Gross Profit was 868.443 + 856.841 + 1759.135 + 910.853 = $4,395 Mil.
Average Total Assets from the begining of this year (May13)
to the end of this year (May14) was
(3850.404 + 3709.861 + 3908.182 + 4002.804 + 3963.104) / 5 = $3,887 Mil.
Total Assets was $3,963 Mil.
Long-Term Debt was $484 Mil.
Total Current Assets was $2,091 Mil.
Total Current Liabilities was $1,301 Mil.
Net Income was 80.931 + 80.279 + 140.145 + 120.938 = $422 Mil.

Revenue was 2364.125 + 2421.688 + 2893.997 + 2573.506 = $10,253 Mil.
Gross Profit was 799.703 + 826.794 + 967.05 + 892.458 = $3,486 Mil.
Average Total Assets from the begining of last year (May12)
to the end of last year (May13) was
(3273.044 + 3373.065 + 3687.446 + 3771.982 + 3850.404) / 5 = $3,591 Mil.
Total Assets was $3,850 Mil.
Long-Term Debt was $500 Mil.
Total Current Assets was $1,902 Mil.
Total Current Liabilities was $1,275 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.

Family Dollar Stores Inc's current net income (ttm) was 430. ==> 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.

Family Dollar Stores Inc's current cash flow from operations (ttm) was 426. ==> 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
=430.283/3886.871
=0.11070164

ROA (Last Year)=Net Income (TTM)/Average Total Assets from May12 to May13
=422.293/3591.1882
=0.11759144

Family Dollar Stores Inc's return on assets of this year was 0.11070164. Family Dollar Stores Inc's return on assets of last year was 0.11759144. ==> 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.

Family Dollar Stores Inc's current net income (ttm) was 430. Family Dollar Stores Inc's current cash flow from operations (ttm) was 426. ==> 426 =< 430 ==> CFROA =< ROA ==> Score 0.

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
=484.188/3963.104
=0.12217393

Gearing (Last Year: May13)=Long-Term Debt/Total Assets
=500.237/3850.404
=0.12991806

Family Dollar Stores Inc's gearing of this year was 0.12217393. Family Dollar Stores Inc's gearing of last year was 0.12991806. ==> 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
=2090.659/1301.275
=1.6066235

Current Ratio (Last Year: May13)=Total Current Assets/Total Current Liabilities
=1901.914/1275.169
=1.49149956

Family Dollar Stores Inc's current ratio of this year was 1.6066235. Family Dollar Stores Inc's current ratio of last year was 1.49149956. ==> 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.

Family Dollar Stores Inc's number of shares in issue this year was 114.2. Family Dollar Stores Inc's number of shares in issue last year was 115.5. ==> 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
=4395.272/12877.233
=0.34132115

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3486.005/10253.316
=0.33998806

Family Dollar Stores Inc's gross margin of this year was 0.34132115. Family Dollar Stores Inc's gross margin of last year was 0.33998806. ==> 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
=12877.233/3886.871
=3.31300756

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from May12 to May13
=10253.316/3591.1882
=2.8551319

Family Dollar Stores Inc's asset turnover of this year was 3.31300756. Family Dollar Stores Inc's asset turnover of last year was 2.8551319. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+0+1+1+1+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Family Dollar Stores Inc has an F-score of 7 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, 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.

Family Dollar Stores Inc Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
Q1 1111111111
Q2 1111111111
Q3 1001011111
Q4 1111111101
Q5 1101111011
Q6 0000010011
Q7 1111101111
Q8 1011011000
Q9 1111011111
F-score 8668588678

Family Dollar Stores Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Q1 1111111111
Q2 1111111111
Q3 1110000000
Q4 1100011110
Q5 1111111111
Q6 0110101111
Q7 1111111111
Q8 0000000001
Q9 1110000011
F-score 7874556677
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