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Five Star Quality Care Inc (NYSE:FVE)
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

Five Star Quality Care Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

FVE' s 10-Year Piotroski F-Score Range
Min: 2   Max: 6
Current: 5

2
6

During the past 13 years, the highest Piotroski F-Score of Five Star Quality Care Inc was 6. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 2.14 + 0.798 + -0.198 + -5.08 = $-2 Mil.
Cash Flow from Operations was 1.91 + 10.212 + 26.238 + -2.583 = $36 Mil.
Revenue was 323.6 + 323.261 + 324.112 + 325.814 = $1,297 Mil.
Gross Profit was 205.204 + 205.356 + 203.902 + 206.07 = $821 Mil.
Average Total Assets from the begining of this year (Dec12)
to the end of this year (Dec13) was
(594.991 + 578.652 + 568.263 + 572.725 + 590.183) / 5 = $581 Mil.
Total Assets as of Dec12 was $595 Mil.
Long-Term Debt was $36 Mil.
Total Current Assets was $151 Mil.
Total Current Liabilities was $199 Mil.
Net Income was 0.472 + 4.91 + 16.213 + 0.712 = $22 Mil.

Revenue was 291.298 + 296.493 + 297.169 + 322.846 = $1,208 Mil.
Gross Profit was 203.633 + 206.598 + 205.343 + 202.827 = $818 Mil.
Average Total Assets from the begining of last year (Dec11)
to the end of last year (Dec12) was
(599.346 + 585.267 + 581.685 + 563.506 + 594.991) / 5 = $585 Mil.
Total Assets as of Dec11 was $599 Mil.
Long-Term Debt was $38 Mil.
Total Current Assets was $160 Mil.
Total Current Liabilities was $203 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Five Star Quality Care Inc's current net income (ttm) was -2. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Five Star Quality Care Inc's current cash flow from operations (ttm) was 36. ==> 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)/Beginning of This Year Total Assets (Dec12)
=-2.34/594.991
=-0.00393283

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Dec11)
=22.307/599.346
=0.0372189

Five Star Quality Care Inc's return on assets of this year was -0.00393283. Five Star Quality Care Inc's return on assets of last year was 0.0372189. ==> 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.

Five Star Quality Care Inc's current net income (ttm) was -2. Five Star Quality Care Inc's current cash flow from operations (ttm) was 36. ==> 36 > -2 ==> 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: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=36.461/580.9628
=0.06275961

Gearing (Last Year: Dec12)=Long-Term Debt/Average Total Assets from Dec11 to Dec12
=37.621/584.959
=0.06431391

Five Star Quality Care Inc's gearing of this year was 0.06275961. Five Star Quality Care Inc's gearing of last year was 0.06431391. ==> 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: Dec13)=Total Current Assets/Total Current Liabilities
=150.884/198.528
=0.7600137

Current Ratio (Last Year: Dec12)=Total Current Assets/Total Current Liabilities
=159.686/202.95
=0.78682434

Five Star Quality Care Inc's current ratio of this year was 0.7600137. Five Star Quality Care Inc's current ratio of last year was 0.78682434. ==> 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.

Five Star Quality Care Inc's number of shares in issue this year was 48.3. Five Star Quality Care Inc's number of shares in issue last year was 50. ==> 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
=820.532/1296.787
=0.63274231

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=818.401/1207.806
=0.67759309

Five Star Quality Care Inc's gross margin of this year was 0.63274231. Five Star Quality Care Inc's gross margin of last year was 0.67759309. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Dec12)
=1296.787/594.991
=2.17950692

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Dec11)
=1207.806/599.346
=2.01520658

Five Star Quality Care Inc's asset turnover of this year was 2.17950692. Five Star Quality Care Inc's asset turnover of last year was 2.01520658. ==> 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+1+0+1+0+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Five Star Quality Care 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, 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.

Five Star Quality Care Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 001011110
Q2 001111111
Q3 001010100
Q4 101101011
Q5 101011011
Q6 011010000
Q7 000100001
Q8 000101000
Q9 010100101
F-score 226555445

Five Star Quality Care Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111110
Q2 1111111111
Q3 0111100000
Q4 1000011111
Q5 0001111111
Q6 0000101110
Q7 0000011011
Q8 1001111000
Q9 0110000011
F-score 4445667575
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