Switch to:
GuruFocus has detected 5 Warning Signs with Guess? Inc $GES.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Guess? Inc (NYSE:GES)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

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

GES' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 5

4
8

During the past 13 years, the highest Piotroski F-Score of Guess? Inc was 8. The lowest was 4. 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 local exchange's currency.

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Net Income was -25.178 + 32.269 + 9.103 + 6.567 = $23 Mil.
Cash Flow from Operations was -30.844 + 13.236 + -13.167 + 102.231 = $71 Mil.
Revenue was 448.815 + 544.959 + 536.321 + 679.273 = $2,209 Mil.
Gross Profit was 142.759 + 185.632 + 180.242 + 236.407 = $745 Mil.
Average Total Assets from the begining of this year (Jan16)
to the end of this year (Jan17) was
(1538.748 + 1552.776 + 1575.016 + 1579.763 + 1534.485) / 5 = $1556.1576 Mil.
Total Assets at the begining of this year (Jan16) was $1,539 Mil.
Long-Term Debt was $23 Mil.
Total Current Assets was $1,044 Mil.
Total Current Liabilities was $345 Mil.
Net Income was 3.341 + 18.289 + 12.444 + 47.777 = $82 Mil.

Revenue was 478.824 + 546.264 + 520.964 + 658.259 = $2,204 Mil.
Gross Profit was 165.485 + 198.117 + 183.664 + 240.164 = $787 Mil.
Average Total Assets from the begining of last year (Jan15)
to the end of last year (Jan16) was
(1601.405 + 1555.239 + 1563.612 + 1522.472 + 1538.748) / 5 = $1556.2952 Mil.
Total Assets at the begining of last year (Jan15) was $1,601 Mil.
Long-Term Debt was $2 Mil.
Total Current Assets was $1,036 Mil.
Total Current Liabilities was $327 Mil.

Profitability

Question 1. 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.

Guess? Inc's current net income (TTM) was 23. ==> Positive ==> Score 1.

Question 2. 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.

Guess? Inc's current cash flow from operations (TTM) was 71. ==> Positive ==> Score 1.

Question 3. 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)/Total Assets at the Beginning of This Year (Jan16)
=22.761/1538.748
=0.0147919

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan15)
=81.851/1601.405
=0.05111199

Guess? Inc's return on assets of this year was 0.0147919. Guess? Inc's return on assets of last year was 0.05111199. ==> Last year is higher ==> Score 0.

Question 4. 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.

Guess? Inc's current net income (TTM) was 23. Guess? Inc's current cash flow from operations (TTM) was 71. ==> 71 > 23 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. 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: Jan17)=Long-Term Debt/Average Total Assets from Jan16 to Jan17
=23.482/1556.1576
=0.01508973

Gearing (Last Year: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=2.318/1556.2952
=0.00148943

Guess? Inc's gearing of this year was 0.01508973. Guess? Inc's gearing of last year was 0.00148943. ==> Last year is lower than this year ==> Score 0.

Question 6. 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: Jan17)=Total Current Assets/Total Current Liabilities
=1044.012/345.453
=3.02215352

Current Ratio (Last Year: Jan16)=Total Current Assets/Total Current Liabilities
=1036.252/327.059
=3.16839469

Guess? Inc's current ratio of this year was 3.02215352. Guess? Inc's current ratio of last year was 3.16839469. ==> Last year's current ratio is higher ==> Score 0.

Question 7. 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.

Guess? Inc's number of shares in issue this year was 83.8. Guess? Inc's number of shares in issue last year was 84.5. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. 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
=745.04/2209.368
=0.33721861

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=787.43/2204.311
=0.35722273

Guess? Inc's gross margin of this year was 0.33721861. Guess? Inc's gross margin of last year was 0.35722273. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year 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 (TTM)/Total Assets at the Beginning of This Year (Jan16)
=2209.368/1538.748
=1.43582185

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan15)
=2204.311/1601.405
=1.37648565

Guess? Inc's asset turnover of this year was 1.43582185. Guess? Inc's asset turnover of last year was 1.37648565. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+0+0+1+0+1
=5

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Guess? 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 local exchange's currency.

Guess? Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Question 1 1111111111
Question 2 1111111111
Question 3 1010000000
Question 4 0111111111
Question 5 1111111110
Question 6 1110101100
Question 7 1110111011
Question 8 1010000000
Question 9 1000001011
F-score 8684657565

Guess? Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Question 1 1111111111
Question 2 1111111111
Question 3 0000000000
Question 4 1111111111
Question 5 1111110000
Question 6 1111000000
Question 7 0000111111
Question 8 0000000000
Question 9 0000011111
F-score 5555565555
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK