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Group 1 Automotive Inc (NYSE:GPI)
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

Group 1 Automotive Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.

GPI' 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 Group 1 Automotive Inc was 8. The lowest was 3. 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 21.721 + 32.765 + 37.388 + 22.118 = $114 Mil.
Cash Flow from Operations was -76.594 + 41.658 + 25.382 + 61.926 = $52 Mil.
Revenue was 2279.492 + 2340.147 + 2335.11 + 1963.832 = $8,919 Mil.
Gross Profit was 321.321 + 329.462 + 341.274 + 300.489 = $1,293 Mil.
Total Assets at the begining of this year (Dec12) was $3,023 Mil.
Total Assets was $3,819 Mil.
Long-Term Debt was $664 Mil.
Total Current Assets was $1,968 Mil.
Total Current Liabilities was $1,865 Mil.
Net Income was 17.132 + 31.335 + 28.625 + 23.117 = $100 Mil.

Revenue was 1938.957 + 1976.572 + 1895.826 + 1664.745 = $7,476 Mil.
Gross Profit was 280.253 + 291.231 + 285.344 + 260.424 = $1,117 Mil.
Total Assets at the begining of last year (Dec11) was $2,476 Mil.
Total Assets was $3,023 Mil.
Long-Term Debt was $555 Mil.
Total Current Assets was $1,566 Mil.
Total Current Liabilities was $1,396 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.

Group 1 Automotive Inc's current net income was 114. ==> 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.

Group 1 Automotive Inc's current cash flow from operations was 52. ==> 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 (Dec12)
=113.992/3023.015
=0.03770805

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=100.209/2476.343
=0.04046653

Group 1 Automotive Inc's return on assets of this year was 0.03770805. Group 1 Automotive Inc's return on assets of last year was 0.04046653. ==> 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.

Group 1 Automotive Inc's current net income was 114. Group 1 Automotive Inc's current cash flow from operations was 52. ==> 52 =< 114 ==> CFROA =< ROA ==> Score 0.

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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=663.689/3819.478
=0.17376432

Gearing (Last Year)=Long-Term Debt/Total Assets
=555.016/3023.015
=0.18359684

Group 1 Automotive Inc's gearing of this year was 0.17376432. Group 1 Automotive Inc's gearing of last year was 0.18359684. ==> This year is lower. ==> 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)=Total Current Assets/Total Current Liabilities
=1967.938/1865.176
=1.05509507

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1566.181/1395.578
=1.12224541

Group 1 Automotive Inc's current ratio of this year was 1.05509507. Group 1 Automotive Inc's current ratio of last year was 1.12224541. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Group 1 Automotive Inc's number of shares in issue this year was 25.8. Group 1 Automotive Inc's number of shares in issue last year was 23.2. ==> There is more 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
=1292.546/8918.581
=0.14492732

Gross Margin (Last Year)=Gross Profit/Revenue
=1117.252/7476.1
=0.14944316

Group 1 Automotive Inc's gross margin of this year was 0.14492732. Group 1 Automotive Inc's gross margin of last year was 0.14944316. ==> 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 (Dec12)
=8918.581/3023.015
=2.95022717

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=7476.1/2476.343
=3.01900827

Group 1 Automotive Inc's asset turnover of this year was 2.95022717. Group 1 Automotive Inc's asset turnover of last year was 3.01900827. ==> 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+0+1+0+0+0+0
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Group 1 Automotive 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.

Group 1 Automotive Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111011111
Q2 1111110101
Q3 0110011110
Q4 0100110100
Q5 1000111011
Q6 0010010000
Q7 0001101100
Q8 0110110000
Q9 1010001010
F-score 4563575543

Group 1 Automotive Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1110000111
Q3 1111110000
Q4 1110000000
Q5 0001111111
Q6 0000000000
Q7 1111000000
Q8 0010000000
Q9 0011111000
F-score 5575443333
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