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

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 (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was 909.998 + -116.232 + -111.998 + -36.948 = $645 Mil.
Cash Flow from Operations was 1929.903 + -381.585 + -245.992 + -619.623 = $683 Mil.
Revenue was 2562.99 + 133.586 + 134.628 + 509.074 = $3,340 Mil.
Gross Profit was 1729.788 + -77.935 + -87.069 + 114.396 = $1,679 Mil.
Average Total Assets from the begining of this year (Jan14)
to the end of this year (Jan15) was
(3515.287 + 4693.529 + 3890.819 + 3091.29 + 4378.941) / 5 = $3913.9732 Mil.
Total Assets at the begining of this year (Jan14) was $3,515 Mil.
Long-Term Debt was $505 Mil.
Total Current Assets was $2,778 Mil.
Total Current Liabilities was $2,471 Mil.
Net Income was 664.34 + -115.187 + -104.943 + -214.711 = $229 Mil.

Revenue was 2200.212 + 127.195 + 134.34 + 199.77 = $2,662 Mil.
Gross Profit was 1378.477 + -82.858 + -86.524 + -163.767 = $1,045 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(3932.496 + 4537.779 + 3762.888 + 3274.513 + 3515.287) / 5 = $3804.5926 Mil.
Total Assets at the begining of last year (Jan13) was $3,932 Mil.
Long-Term Debt was $506 Mil.
Total Current Assets was $1,505 Mil.
Total Current Liabilities was $2,055 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.

H&R Block Inc's current net income (TTM) was 645. ==> 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.

H&R Block Inc's current cash flow from operations (TTM) was 683. ==> 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 (Jan14)
=644.82/3515.287
=0.1834331

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=229.499/3932.496
=0.05835963

H&R Block Inc's return on assets of this year was 0.1834331. H&R Block Inc's return on assets of last year was 0.05835963. ==> This year is higher. ==> Score 1.

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.

H&R Block Inc's current net income (TTM) was 645. H&R Block Inc's current cash flow from operations (TTM) was 683. ==> 683 > 645 ==> 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: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=505.46/3913.9732
=0.12914243

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=505.959/3804.5926
=0.13298638

H&R Block Inc's gearing of this year was 0.12914243. H&R Block Inc's gearing of last year was 0.13298638. ==> This year is lower or equal to last year. ==> Score 1.

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: Jan15)=Total Current Assets/Total Current Liabilities
=2778.319/2471.104
=1.12432297

Current Ratio (Last Year: Jan14)=Total Current Assets/Total Current Liabilities
=1504.711/2054.52
=0.73239053

H&R Block Inc's current ratio of this year was 1.12432297. H&R Block Inc's current ratio of last year was 0.73239053. ==> 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.

H&R Block Inc's number of shares in issue this year was 275.2. H&R Block Inc's number of shares in issue last year was 274.1. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=1679.18/3340.278
=0.50270666

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1045.328/2661.517
=0.39275646

H&R Block Inc's gross margin of this year was 0.50270666. H&R Block Inc's gross margin of last year was 0.39275646. ==> 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 (Jan14)
=3340.278/3515.287
=0.95021488

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=2661.517/3932.496
=0.67680094

H&R Block Inc's asset turnover of this year was 0.95021488. H&R Block Inc's asset turnover of last year was 0.67680094. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+1+0+1+1
=8

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

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


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
Question 1 1100111111
Question 2 1101111111
Question 3 0001110011
Question 4 0101111111
Question 5 0100010101
Question 6 1001110011
Question 7 1110011110
Question 8 0100000111
Question 9 0110100011
F-score 4724674688

H&R Block Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 1111111111
Question 2 1111111111
Question 3 1111101111
Question 4 1111111111
Question 5 0000111101
Question 6 0111001111
Question 7 1111100000
Question 8 1111101111
Question 9 0011111011
F-score 6788858778
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