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Nicholas Financial Inc (NAS:NICK)
Piotroski F-Score
6 (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

Nicholas Financial Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NICK' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of Nicholas Financial Inc was 8. The lowest was 4. 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 (Mar16) TTM:Last Year (Mar15) TTM:
Net Income was 3.67 + 3.256 + 2.727 + 2.725 = $12.38 Mil.
Cash Flow from Operations was 8.622 + 3.31 + 5.461 + 6.678 = $24.07 Mil.
Revenue was 22.025 + 22.687 + 22.757 + 23.238 = $90.71 Mil.
Gross Profit was 22.025 + 22.687 + 22.757 + 14.411 = $81.88 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(302.529 + 312.311 + 321.326 + 324.486 + 325.309) / 5 = $317.1922 Mil.
Total Assets at the begining of this year (Mar15) was $302.53 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $317.40 Mil.
Total Current Liabilities was $218.34 Mil.
Net Income was 4.909 + 4.33 + 3.77 + 3.848 = $16.86 Mil.

Revenue was 21.333 + 21.723 + 21.801 + 21.934 = $86.79 Mil.
Gross Profit was 21.333 + 21.723 + 21.801 + 21.934 = $86.79 Mil.
Average Total Assets from the begining of last year (Mar14)
to the end of last year (Mar15) was
(283.43 + 291.285 + 295.775 + 296.5 + 302.529) / 5 = $293.9038 Mil.
Total Assets at the begining of last year (Mar14) was $283.43 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $295.30 Mil.
Total Current Liabilities was $209.32 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.

Nicholas Financial Inc's current net income (TTM) was 12.38. ==> 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.

Nicholas Financial Inc's current cash flow from operations (TTM) was 24.07. ==> 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 (Mar15)
=12.378/302.529
=0.04091509

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=16.857/283.43
=0.059475

Nicholas Financial Inc's return on assets of this year was 0.04091509. Nicholas Financial Inc's return on assets of last year was 0.059475. ==> 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.

Nicholas Financial Inc's current net income (TTM) was 12.38. Nicholas Financial Inc's current cash flow from operations (TTM) was 24.07. ==> 24.07 > 12.38 ==> 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: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=0/317.1922
=0

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=0/293.9038
=0

Nicholas Financial Inc's gearing of this year was 0. Nicholas Financial Inc's gearing of last year was 0. ==> 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: Mar16)=Total Current Assets/Total Current Liabilities
=317.404/218.338
=1.45372771

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=295.296/209.317
=1.41075976

Nicholas Financial Inc's current ratio of this year was 1.45372771. Nicholas Financial Inc's current ratio of last year was 1.41075976. ==> 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.

Nicholas Financial Inc's number of shares in issue this year was 7.7. Nicholas Financial Inc's number of shares in issue last year was 12.2. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=81.88/90.707
=0.90268667

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=86.791/86.791
=1

Nicholas Financial Inc's gross margin of this year was 0.90268667. Nicholas Financial Inc's gross margin of last year was 1. ==> 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 (Mar15)
=90.707/302.529
=0.29982911

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=86.791/283.43
=0.3062167

Nicholas Financial Inc's asset turnover of this year was 0.29982911. Nicholas Financial Inc's asset turnover of last year was 0.3062167. ==> 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+1+0+0
=6

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

Nicholas Financial Inc has an F-score of 6 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.

Nicholas Financial Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
Question 1 1111111111
Question 2 1111111111
Question 3 0001110000
Question 4 1111101111
Question 5 1111111111
Question 6 0011110101
Question 7 1000000011
Question 8 1010111010
Question 9 0001101000
F-score 6467866566

Nicholas Financial Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Question 1 1111111111
Question 2 1111111111
Question 3 0000000000
Question 4 1111111111
Question 5 1111111111
Question 6 1111100001
Question 7 0000011111
Question 8 1000011110
Question 9 0000000000
F-score 6555566666
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