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Flowers Foods Inc (NYSE:FLO)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Flowers Foods Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.

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

3
8

During the past 13 years, the highest Piotroski F-Score of Flowers Foods 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 42.064 + 61.066 + 38.52 + 33.888 = $176 Mil.
Cash Flow from Operations was 51.09 + 121.821 + 50.224 + 44.658 = $268 Mil.
Revenue was 877.378 + 1159.76 + 843.55 + 878.492 = $3,759 Mil.
Gross Profit was 419.359 + 563.883 + 396.039 + 410.694 = $1,790 Mil.
Total Assets at the begining of this year (Jun13) was $2,155 Mil.
Total Assets was $2,484 Mil.
Long-Term Debt was $792 Mil.
Total Current Assets was $501 Mil.
Total Current Liabilities was $339 Mil.
Net Income was 46.46 + 112.026 + 38.567 + 31.231 = $228 Mil.

Revenue was 898.153 + 1130.81 + 749.442 + 717.282 = $3,496 Mil.
Gross Profit was 426.539 + 545.512 + 358.776 + 334.774 = $1,666 Mil.
Total Assets at the begining of last year (Jun12) was $1,755 Mil.
Total Assets was $2,155 Mil.
Long-Term Debt was $562 Mil.
Total Current Assets was $505 Mil.
Total Current Liabilities was $325 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.

Flowers Foods Inc's current net income was 176. ==> 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.

Flowers Foods Inc's current cash flow from operations was 268. ==> 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)
=175.538/2155.466
=0.08143854

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=228.284/1754.553
=0.13010949

Flowers Foods Inc's return on assets of this year was 0.08143854. Flowers Foods Inc's return on assets of last year was 0.13010949. ==> 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.

Flowers Foods Inc's current net income was 176. Flowers Foods Inc's current cash flow from operations was 268. ==> 268 > 176 ==> 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
=791.791/2484.087
=0.31874528

Gearing (Last Year)=Long-Term Debt/Total Assets
=561.826/2155.466
=0.26065176

Flowers Foods Inc's gearing of this year was 0.31874528. Flowers Foods Inc's gearing of last year was 0.26065176. ==> 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
=500.813/339.142
=1.47670592

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=505.212/325.455
=1.55232521

Flowers Foods Inc's current ratio of this year was 1.47670592. Flowers Foods Inc's current ratio of last year was 1.55232521. ==> 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.

Flowers Foods Inc's number of shares in issue this year was 212.9. Flowers Foods Inc's number of shares in issue last year was 211.9. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=1789.975/3759.18
=0.47616102

Gross Margin (Last Year)=Gross Profit/Revenue
=1665.601/3495.687
=0.47647315

Flowers Foods Inc's gross margin of this year was 0.47616102. Flowers Foods Inc's gross margin of last year was 0.47647315. ==> 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)
=3759.18/2155.466
=1.74402194

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=3495.687/1754.553
=1.9923519

Flowers Foods Inc's asset turnover of this year was 1.74402194. Flowers Foods Inc's asset turnover of last year was 1.9923519. ==> 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+0+0+0
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Flowers Foods Inc has an F-score of 3 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.

Flowers Foods Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1111101001
Q4 1111011111
Q5 0011011000
Q6 0000110101
Q7 1111011100
Q8 0100001011
Q9 1111100100
F-score 6777567646

Flowers Foods Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0000111100
Q4 1111111111
Q5 0000000000
Q6 1100001100
Q7 0000000000
Q8 0001111110
Q9 1000011000
F-score 5434567643
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