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Inland Real Estate Corp (NYSE:IRC)
Piotroski F-Score
5 (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

Inland Real Estate Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

IRC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 6
Current: 5

3
6

During the past 13 years, the highest Piotroski F-Score of Inland Real Estate Corp was 6. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 15.424 + 12.646 + 4.576 + 6.528 = $39.2 Mil.
Cash Flow from Operations was 16.08 + 20.96 + 14.33 + 31.095 = $82.5 Mil.
Revenue was 57.106 + 48.807 + 48.21 + 50.638 = $204.8 Mil.
Gross Profit was 44.732 + 42.227 + 42.083 + 43.387 = $172.4 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(1529.937 + 1583.763 + 1570.95 + 1530.493 + 1572.951) / 5 = $1557.6188 Mil.
Total Assets at the begining of this year (Dec13) was $1,529.9 Mil.
Long-Term Debt was $824.8 Mil.
Total Current Assets was $56.6 Mil.
Total Current Liabilities was $102.7 Mil.
Net Income was 6.901 + 103.97 + 5.696 + -4.884 = $111.7 Mil.

Revenue was 38.9 + 41.301 + 50.567 + 52.605 = $183.4 Mil.
Gross Profit was 31.758 + 35.904 + 44.643 + 44.815 = $157.1 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(1243.405 + 1211.528 + 1583.5 + 1570.932 + 1529.937) / 5 = $1427.8604 Mil.
Total Assets at the begining of last year (Dec12) was $1,243.4 Mil.
Long-Term Debt was $851.6 Mil.
Total Current Assets was $48.4 Mil.
Total Current Liabilities was $105.4 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.

Inland Real Estate Corp's current net income (TTM) was 39.2. ==> 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.

Inland Real Estate Corp's current cash flow from operations (TTM) was 82.5. ==> 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 (Dec13)
=39.174/1529.937
=0.02560498

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=111.683/1243.405
=0.08982029

Inland Real Estate Corp's return on assets of this year was 0.02560498. Inland Real Estate Corp's return on assets of last year was 0.08982029. ==> 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.

Inland Real Estate Corp's current net income (TTM) was 39.2. Inland Real Estate Corp's current cash flow from operations (TTM) was 82.5. ==> 82.5 > 39.2 ==> 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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=824.769/1557.6188
=0.52950632

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=851.622/1427.8604
=0.59643226

Inland Real Estate Corp's gearing of this year was 0.52950632. Inland Real Estate Corp's gearing of last year was 0.59643226. ==> 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: Dec14)=Total Current Assets/Total Current Liabilities
=56.596/102.716
=0.55099498

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=48.413/105.433
=0.45918261

Inland Real Estate Corp's current ratio of this year was 0.55099498. Inland Real Estate Corp's current ratio of last year was 0.45918261. ==> 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.

Inland Real Estate Corp's number of shares in issue this year was 100.1. Inland Real Estate Corp's number of shares in issue last year was 99.7. ==> 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
=172.429/204.761
=0.84209884

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=157.12/183.373
=0.85683279

Inland Real Estate Corp's gross margin of this year was 0.84209884. Inland Real Estate Corp's gross margin of last year was 0.85683279. ==> 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 (Dec13)
=204.761/1529.937
=0.13383623

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=183.373/1243.405
=0.14747649

Inland Real Estate Corp's asset turnover of this year was 0.13383623. Inland Real Estate Corp's asset turnover of last year was 0.14747649. ==> 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+1+1+0+0+0
=5

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

Inland Real Estate Corp has an F-score of 5 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.

Inland Real Estate Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111110111
Question 2 1111111111
Question 3 1000000110
Question 4 1111111101
Question 5 0101111011
Question 6 0010000001
Question 7 0110000000
Question 8 0011000100
Question 9 1100010100
F-score 5665453645

Inland Real Estate Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1111111000
Question 4 0110000111
Question 5 0011110011
Question 6 1000000101
Question 7 0000000000
Question 8 0111110000
Question 9 0111101100
F-score 4676654545
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