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H&R Block Inc (NYSE:HRB)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

H&R Block Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

HRB' s 10-Year Piotroski F-Score Range
Min: 1   Max: 9
Current: 8

1
9

During the past 13 years, the highest Piotroski F-Score of H&R Block Inc was 9. The lowest was 1. 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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was -104.943 + -214.711 + 909.998 + -116.232 = $474 Mil.
Cash Flow from Operations was -173.631 + -627.949 + 1929.903 + -381.585 = $747 Mil.
Revenue was 134.34 + 199.77 + 2562.99 + 133.586 = $3,031 Mil.
Gross Profit was -86.524 + -163.767 + 1729.788 + -77.935 = $1,402 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(3762.888 + 3274.513 + 3515.287 + 4693.529 + 3890.819) / 5 = $3,827 Mil.
Total Assets was $3,891 Mil.
Long-Term Debt was $506 Mil.
Total Current Assets was $2,292 Mil.
Total Current Liabilities was $1,684 Mil.
Net Income was -105.243 + -17.708 + 664.34 + -115.187 = $426 Mil.

Revenue was 137.263 + 471.979 + 2200.212 + 127.195 = $2,937 Mil.
Gross Profit was -74.748 + 94.361 + 1378.477 + -82.858 = $1,315 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(3594.277 + 3896.73 + 3932.496 + 4537.779 + 3762.888) / 5 = $3,945 Mil.
Total Assets was $3,763 Mil.
Long-Term Debt was $906 Mil.
Total Current Assets was $1,705 Mil.
Total Current Liabilities was $1,450 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

H&R Block Inc's current net income (ttm) was 474. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

H&R Block Inc's current cash flow from operations (ttm) was 747. ==> 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)/Average Total Assets from Jul13 to Jul14
=474.112/3827.4072
=0.12387289

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jul12 to Jul13
=426.202/3944.834
=0.10804054

H&R Block Inc's return on assets of this year was 0.12387289. H&R Block Inc's return on assets of last year was 0.10804054. ==> This year is higher. ==> Score 1.

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.

H&R Block Inc's current net income (ttm) was 474. H&R Block Inc's current cash flow from operations (ttm) was 747. ==> 747 > 474 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul14)=Long-Term Debt/Total Assets
=505.714/3890.819
=0.12997623

Gearing (Last Year: Jul13)=Long-Term Debt/Total Assets
=905.902/3762.888
=0.24074647

H&R Block Inc's gearing of this year was 0.12997623. H&R Block Inc's gearing of last year was 0.24074647. ==> 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: Jul14)=Total Current Assets/Total Current Liabilities
=2292.161/1683.919
=1.36120621

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=1704.932/1450.484
=1.17542282

H&R Block Inc's current ratio of this year was 1.36120621. H&R Block Inc's current ratio of last year was 1.17542282. ==> 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.

H&R Block Inc's number of shares in issue this year was 274.6. H&R Block Inc's number of shares in issue last year was 273.1. ==> 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
=1401.562/3030.686
=0.46245701

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1315.232/2936.649
=0.4478683

H&R Block Inc's gross margin of this year was 0.46245701. H&R Block Inc's gross margin of last year was 0.4478683. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jul13 to Jul14
=3030.686/3827.4072
=0.79183788

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jul12 to Jul13
=2936.649/3944.834
=0.74442904

H&R Block Inc's asset turnover of this year was 0.79183788. H&R Block Inc's asset turnover of last year was 0.74442904. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+0+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

H&R Block Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

H&R Block Inc Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
Q1 1100111111
Q2 1101111111
Q3 0001100011
Q4 0101111111
Q5 0110011101
Q6 1001110011
Q7 1110011110
Q8 0100001111
Q9 0110000110
F-score 4734566787

H&R Block Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1111111111
Q2 1111111111
Q3 0111111011
Q4 1111111111
Q5 1110001111
Q6 0001110011
Q7 1111111000
Q8 1111111011
Q9 1111111111
F-score 7888888588
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