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Group 1 Automotive Inc (NYSE:GPI)
Piotroski F-Score
6 (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

Group 1 Automotive Inc has an F-score of 6 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: 6

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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 16.862 + 26.162 + 18.677 + 35.815 = $98 Mil.
Cash Flow from Operations was -2.259 + 140.903 + -73.548 + 58.167 = $123 Mil.
Revenue was 2511.638 + 2626.448 + 2538.94 + 2432.854 = $10,110 Mil.
Gross Profit was 369.148 + 374.709 + 365.959 + 363.884 = $1,474 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(3825.937 + 3976.89 + 3962.509 + 4141.492 + 4098.467) / 5 = $4001.059 Mil.
Total Assets at the begining of this year (Mar14) was $3,826 Mil.
Long-Term Debt was $1,078 Mil.
Total Current Assets was $1,982 Mil.
Total Current Liabilities was $1,817 Mil.
Net Income was 37.388 + 32.765 + 21.721 + 31.303 = $123 Mil.

Revenue was 2335.11 + 2340.147 + 2279.492 + 2260.863 = $9,216 Mil.
Gross Profit was 341.274 + 329.462 + 321.321 + 338.122 = $1,330 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(3425.96 + 3409.318 + 3409.908 + 3819.478 + 3825.937) / 5 = $3578.1202 Mil.
Total Assets at the begining of last year (Mar13) was $3,426 Mil.
Long-Term Debt was $665 Mil.
Total Current Assets was $1,936 Mil.
Total Current Liabilities was $1,851 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.

Group 1 Automotive Inc's current net income (TTM) was 98. ==> 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.

Group 1 Automotive Inc's current cash flow from operations (TTM) was 123. ==> 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 (Mar14)
=97.516/3825.937
=0.02548814

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=123.177/3425.96
=0.03595401

Group 1 Automotive Inc's return on assets of this year was 0.02548814. Group 1 Automotive Inc's return on assets of last year was 0.03595401. ==> 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.

Group 1 Automotive Inc's current net income (TTM) was 98. Group 1 Automotive Inc's current cash flow from operations (TTM) was 123. ==> 123 > 98 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=1077.964/4001.059
=0.26941967

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=665.042/3578.1202
=0.18586352

Group 1 Automotive Inc's gearing of this year was 0.26941967. Group 1 Automotive Inc's gearing of last year was 0.18586352. ==> 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: Mar15)=Total Current Assets/Total Current Liabilities
=1982.489/1817.106
=1.0910145

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=1936.273/1850.919
=1.04611439

Group 1 Automotive Inc's current ratio of this year was 1.0910145. Group 1 Automotive Inc's current ratio of last year was 1.04611439. ==> This year's current ratio is higher. ==> Score 1.

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.

Group 1 Automotive Inc's number of shares in issue this year was 23.4. Group 1 Automotive Inc's number of shares in issue last year was 25.4. ==> 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
=1473.7/10109.88
=0.1457683

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1330.179/9215.612
=0.14433974

Group 1 Automotive Inc's gross margin of this year was 0.1457683. Group 1 Automotive Inc's gross margin of last year was 0.14433974. ==> This year's gross margin is higher. ==> Score 1.

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 (Mar14)
=10109.88/3825.937
=2.64245857

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=9215.612/3425.96
=2.68993567

Group 1 Automotive Inc's asset turnover of this year was 2.64245857. Group 1 Automotive Inc's asset turnover of last year was 2.68993567. ==> Last year's asset turnover is higher ==> Score 0.

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+1+1+1+0
=6

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

Group 1 Automotive Inc has an F-score of 6 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1110111111
Question 2 1111101011
Question 3 1100111100
Question 4 1001101001
Question 5 1001110110
Question 6 0100100001
Question 7 0011011001
Question 8 1101100001
Question 9 0100010100
F-score 6635755436

Group 1 Automotive Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 0011111111
Question 3 1000000000
Question 4 0000010111
Question 5 1111110000
Question 6 0000011011
Question 7 0000000111
Question 8 0000000011
Question 9 1100000000
F-score 4333353466
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