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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 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 5

3
9

During the past 13 years, the highest Piotroski F-Score of Guess? 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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 69.632 + -2.101 + 21.954 + 20.788 = $110 Mil.
Cash Flow from Operations was 190.653 + -0.233 + 30.596 + -35.247 = $186 Mil.
Revenue was 768.363 + 522.541 + 608.571 + 589.834 = $2,489 Mil.
Gross Profit was 301.949 + 176.231 + 216.777 + 213.958 = $909 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(1696.831 + 1764.431 + 1713.751 + 1740.419 + 1654.096) / 5 = $1713.9056 Mil.
Total Assets at the begining of this year (Oct13) was $1,697 Mil.
Long-Term Debt was $7 Mil.
Total Current Assets was $1,138 Mil.
Total Current Liabilities was $317 Mil.
Net Income was 72.552 + 9.916 + 39.866 + 34.02 = $156 Mil.

Revenue was 815.118 + 548.914 + 639.012 + 613.497 = $2,617 Mil.
Gross Profit was 332.878 + 197.426 + 248.532 + 228.227 = $1,007 Mil.
Average Total Assets from the begining of last year (Oct12)
to the end of last year (Oct13) was
(1743.068 + 1713.506 + 1621.468 + 1681.003 + 1696.831) / 5 = $1691.1752 Mil.
Total Assets at the begining of last year (Oct12) was $1,743 Mil.
Long-Term Debt was $8 Mil.
Total Current Assets was $1,150 Mil.
Total Current Liabilities was $362 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.

Guess? Inc's current net income (TTM) was 110. ==> 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.

Guess? Inc's current cash flow from operations (TTM) was 186. ==> 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)/Total Assets at the Beginning of This Year (Oct13)
=110.273/1696.831
=0.06498762

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=156.354/1743.068
=0.08970046

Guess? Inc's return on assets of this year was 0.06498762. Guess? Inc's return on assets of last year was 0.08970046. ==> 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.

Guess? Inc's current net income (TTM) was 110. Guess? Inc's current cash flow from operations (TTM) was 186. ==> 186 > 110 ==> 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: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=6.738/1713.9056
=0.00393137

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Oct12 to Oct13
=7.613/1691.1752
=0.0045016

Guess? Inc's gearing of this year was 0.00393137. Guess? Inc's gearing of last year was 0.0045016. ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=1138.429/316.674
=3.5949557

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=1149.725/362.421
=3.17234653

Guess? Inc's current ratio of this year was 3.5949557. Guess? Inc's current ratio of last year was 3.17234653. ==> 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.

Guess? Inc's number of shares in issue this year was 84.8. Guess? Inc's number of shares in issue last year was 84.4. ==> 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: TTM)=Gross Profit/Revenue
=908.915/2489.309
=0.36512743

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1007.063/2616.541
=0.38488332

Guess? Inc's gross margin of this year was 0.36512743. Guess? Inc's gross margin of last year was 0.38488332. ==> 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 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 (Oct13)
=2489.309/1696.831
=1.46703414

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=2616.541/1743.068
=1.50111241

Guess? Inc's asset turnover of this year was 1.46703414. Guess? Inc's asset turnover of last year was 1.50111241. ==> 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+1+1+0+0+0
=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 own currency.

Guess? Inc Annual Data

Dec04Dec05Dec06Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 1111010000
Q4 1110111111
Q5 1111111111
Q6 1011110101
Q7 0001110111
Q8 1111010000
Q9 1101000001
F-score 8778684657

Guess? Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 1111111111
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 1111111111
Q6 0000111111
Q7 1111111100
Q8 0000000000
Q9 0000111100
F-score 5555777755
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