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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 Piotroski F-Score Range Over the Past 10 Years
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 local exchange's currency.

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Net Income was 2.94 + 8.661 + 12.274 + 1.656 = $25.5 Mil.
Cash Flow from Operations was 20.739 + 29.27 + 24.07 + 23.273 = $97.4 Mil.
Revenue was 55.767 + 49.336 + 48.244 + 50.553 = $203.9 Mil.
Gross Profit was 46.847 + 42.884 + 41.73 + 43.089 = $174.6 Mil.
Average Total Assets from the begining of this year (Dec14)
to the end of this year (Dec15) was
(1572.951 + 1571.153 + 1592.154 + 1550.101 + 1521.5) / 5 = $1561.5718 Mil.
Total Assets at the begining of this year (Dec14) was $1,573.0 Mil.
Long-Term Debt was $849.1 Mil.
Total Current Assets was $45.7 Mil.
Total Current Liabilities was $69.2 Mil.
Net Income was 15.424 + 12.646 + 4.576 + 6.528 = $39.2 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 last year (Dec13)
to the end of last year (Dec14) was
(1529.937 + 1583.763 + 1570.95 + 1530.493 + 1572.951) / 5 = $1557.6188 Mil.
Total Assets at the begining of last year (Dec13) was $1,529.9 Mil.
Long-Term Debt was $865.9 Mil.
Total Current Assets was $56.6 Mil.
Total Current Liabilities was $61.6 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 25.5. ==> 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 97.4. ==> 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 (Dec14)
=25.531/1572.951
=0.01623127

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=39.174/1529.937
=0.02560498

Inland Real Estate Corp's return on assets of this year was 0.01623127. Inland Real Estate Corp's return on assets of last year was 0.02560498. ==> 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 25.5. Inland Real Estate Corp's current cash flow from operations (TTM) was 97.4. ==> 97.4 > 25.5 ==> 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: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=849.09/1561.5718
=0.54374061

Gearing (Last Year: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=865.877/1557.6188
=0.55589789

Inland Real Estate Corp's gearing of this year was 0.54374061. Inland Real Estate Corp's gearing of last year was 0.55589789. ==> 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: Dec15)=Total Current Assets/Total Current Liabilities
=45.718/69.154
=0.6611042

Current Ratio (Last Year: Dec14)=Total Current Assets/Total Current Liabilities
=56.596/61.608
=0.91864693

Inland Real Estate Corp's current ratio of this year was 0.6611042. Inland Real Estate Corp's current ratio of last year was 0.91864693. ==> 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.

Inland Real Estate Corp's number of shares in issue this year was 100.5. Inland Real Estate Corp's number of shares in issue last year was 99.9. ==> 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
=174.55/203.9
=0.85605689

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=172.429/204.761
=0.84209884

Inland Real Estate Corp's gross margin of this year was 0.85605689. Inland Real Estate Corp's gross margin of last year was 0.84209884. ==> 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 (Dec14)
=203.9/1572.951
=0.12962896

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=204.761/1529.937
=0.13383623

Inland Real Estate Corp's asset turnover of this year was 0.12962896. Inland Real Estate Corp's asset turnover of last year was 0.13383623. ==> 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+0+0+1+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 local exchange's currency.

Inland Real Estate Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111001111
Question 2 1111111111
Question 3 0000001100
Question 4 1111111011
Question 5 1011110111
Question 6 0100000010
Question 7 1100000000
Question 8 0010011101
Question 9 1000011000
F-score 6554356555

Inland Real Estate Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 1110000010
Question 4 0001111111
Question 5 1100111111
Question 6 0001011110
Question 7 0000000000
Question 8 1100001111
Question 9 1011000010
F-score 6545456685
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