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Homeinns Hotel Group (NAS:HMIN)
Piotroski F-Score
0 (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

Homeinns Hotel Group has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 13.6656109621 + -6.02234475684 + 11.6131631535 + 22.8654438093 = $42.1 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0.0 Mil.
Revenue was 248.033480917 + 221.542653801 + 252.835202733 + 274.358942145 = $996.8 Mil.
Gross Profit was 32.6674853763 + 11.8510563267 + 39.6852639722 + 51.2397135498 = $135.4 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(1508.72128637 + 1518.06482888 + 1464.0436957 + 1497.20830916 + 1510.44051134) / 5 = $1499.69572629 Mil.
Total Assets at the begining of this year (Sep14) was $1,508.7 Mil.
Long-Term Debt was $47.7 Mil.
Total Current Assets was $285.7 Mil.
Total Current Liabilities was $443.4 Mil.
Net Income was 2.11606848864 + 12.1278146768 + 17.360446827 + 39.9973933726 = $71.6 Mil.

Revenue was 248.797003622 + 223.261623198 + 255.836356049 + 287.452673422 = $1,015.3 Mil.
Gross Profit was 38.4142245637 + 20.7255791349 + 51.3568516676 + 64.7067544231 = $175.2 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(1532.29035948 + 0 + 0 + 1615.7880461 + 1508.72128637) / 5 = $931.359938389 Mil.
Total Assets at the begining of last year (Sep13) was $1,532.3 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $200.5 Mil.
Total Current Liabilities was $285.3 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.

Homeinns Hotel Group's current net income (TTM) was 42.1. ==> 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.

Homeinns Hotel Group's current cash flow from operations (TTM) was 0.0. ==> Negative ==> Score 0.

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 (Sep14)
=42.121873168/1508.72128637
=0.02791892

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=71.6017233651/1532.29035948
=0.04672856

Homeinns Hotel Group's return on assets of this year was 0.02791892. Homeinns Hotel Group's return on assets of last year was 0.04672856. ==> 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.

Homeinns Hotel Group's current net income (TTM) was 42.1. Homeinns Hotel Group's current cash flow from operations (TTM) was 0.0. ==> 0.0 <= 42.1 ==> CFROA <= ROA ==> Score 0.

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: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=47.7460895785/1499.69572629
=0.03183718

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=0/931.359938389
=0

Homeinns Hotel Group's gearing of this year was 0.03183718. Homeinns Hotel Group's gearing of last year was 0. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=285.700263836/443.443055468
=0.64427723

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=200.507477762/285.265387247
=0.7028805

Homeinns Hotel Group's current ratio of this year was 0.64427723. Homeinns Hotel Group's current ratio of last year was 0.7028805. ==> 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.

Homeinns Hotel Group's number of shares in issue this year was 48.2. Homeinns Hotel Group's number of shares in issue last year was 51.5. ==> 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
=135.443519225/996.770279595
=0.13588238

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=175.203409789/1015.34765629
=0.17255509

Homeinns Hotel Group's gross margin of this year was 0.13588238. Homeinns Hotel Group's gross margin of last year was 0.17255509. ==> 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 (Sep14)
=996.770279595/1508.72128637
=0.66067225

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=1015.34765629/1532.29035948
=0.66263398

Homeinns Hotel Group's asset turnover of this year was 0.66067225. Homeinns Hotel Group's asset turnover of last year was 0.66263398. ==> 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+0+0+0+0+0+1+0+0
=2

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

Homeinns Hotel Group has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


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.

Homeinns Hotel Group Annual Data

Dec06Dec07Dec08Dec09
Question 1 1111
Question 2 0000
Question 3 1001
Question 4 0000
Question 5 1011
Question 6 1000
Question 7 0000
Question 8 0001
Question 9 1001
F-score 5125

Homeinns Hotel Group Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 11111
Question 2 00000
Question 3 11110
Question 4 00000
Question 5 01110
Question 6 11000
Question 7 01001
Question 8 11100
Question 9 01100
F-score 47532
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