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Merus Labs International Inc (NAS:MSLI)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Merus Labs International Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

MSLI' s 10-Year Piotroski F-Score Range
Min: 1   Max: 7
Current: 4

1
7

During the past 13 years, the highest Piotroski F-Score of Merus Labs International Inc was 7. The lowest was 1. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was -0.0511583011583 + -1.7239488117 + -1.32393084622 + -0.16016388863 = $-3.26 Mil.
Cash Flow from Operations was 3.16023166023 + 2.91316270567 + 2.66787989081 + 2.95372008567 = $11.69 Mil.
Revenue was 7.95366795367 + 5.71937842779 + 6.08735213831 + 6.69056709191 = $26.45 Mil.
Gross Profit was 7.04054054054 + 4.82084095064 + 4.98544131028 + 5.41763665146 = $22.26 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(90.9355769231 + 84.0154440154 + 79.3692870201 + 98.4003639672 + 123.085948412) / 5 = $95.16 Mil.
Total Assets as of Jun13 was $90.94 Mil.
Long-Term Debt was $22.32 Mil.
Total Current Assets was $63.27 Mil.
Total Current Liabilities was $11.38 Mil.
Net Income was -21.040526849 + 0.300403225806 + -2.25613346418 + -1.00769230769 = $-24.00 Mil.

Revenue was 5.06382978723 + 7.03528225806 + 5.73994111874 + 7.03653846154 = $24.88 Mil.
Gross Profit was 4.63120567376 + 6.66733870968 + 5.43768400393 + 6.23653846154 = $22.97 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(57.6538461538 + 93.5957446809 + 91.8881048387 + 88.2325809617 + 90.9355769231) / 5 = $84.46 Mil.
Total Assets as of Jun12 was $57.65 Mil.
Long-Term Debt was $12.74 Mil.
Total Current Assets was $18.56 Mil.
Total Current Liabilities was $37.74 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Merus Labs International Inc's current net income (ttm) was -3.26. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Merus Labs International Inc's current cash flow from operations (ttm) was 11.69. ==> 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)/Beginning of This Year Total Assets (Jun13)
=-3.25920184771/90.9355769231
=-0.03584078

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jun12)
=-24.0039493951/57.6538461538
=-0.41634602

Merus Labs International Inc's return on assets of this year was -0.03584078. Merus Labs International Inc's return on assets of last year was -0.41634602. ==> 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.

Merus Labs International Inc's current net income (ttm) was -3.26. Merus Labs International Inc's current cash flow from operations (ttm) was 11.69. ==> 11.69 > -3.26 ==> CFROA > ROA ==> Score 1.

Funding

Q5. 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: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=22.3158580873/95.1613240676
=0.23450554

Gearing (Last Year: Jun13)=Long-Term Debt/Average Total Assets from Jun12 to Jun13
=12.7394230769/84.4611707116
=0.15083171

Merus Labs International Inc's gearing of this year was 0.23450554. Merus Labs International Inc's gearing of last year was 0.15083171. ==> Last year is lower than this year ==> Score 0.

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: Jun14)=Total Current Assets/Total Current Liabilities
=63.2684607505/11.3846726883
=5.55733682

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=18.5576923077/37.7442307692
=0.49166964

Merus Labs International Inc's current ratio of this year was 5.55733682. Merus Labs International Inc's current ratio of last year was 0.49166964. ==> 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.

Merus Labs International Inc's number of shares in issue this year was 54. Merus Labs International Inc's number of shares in issue last year was 32.7. ==> 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
=22.2644594529/26.4509656117
=0.84172577

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=22.9727668489/24.8755916256
=0.92350635

Merus Labs International Inc's gross margin of this year was 0.84172577. Merus Labs International Inc's gross margin of last year was 0.92350635. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Jun13)
=26.4509656117/90.9355769231
=0.29087588

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jun12)
=24.8755916256/57.6538461538
=0.43146456

Merus Labs International Inc's asset turnover of this year was 0.29087588. Merus Labs International Inc's asset turnover of last year was 0.43146456. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+1+1+0+1+0+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Merus Labs International Inc has an F-score of 4 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, 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.

Merus Labs International Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Q1 0111000000
Q2 0111110011
Q3 0101001001
Q4 1010110111
Q5 1111110101
Q6 1010010101
Q7 0011111100
Q8 0000000001
Q9 1001111010
F-score 4466563436

Merus Labs International Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 0100000000
Q2 1011111111
Q3 1100001111
Q4 1011111111
Q5 0000001110
Q6 0010001111
Q7 0000001000
Q8 0001111000
Q9 0111100000
F-score 4344337554
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