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Office Depot Inc (NYSE:ODP)
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

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

ODP' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 4

3
9

During the past 13 years, the highest Piotroski F-Score of Office Depot Inc was 9. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was -109 + -120.039 + 160.9 + -54.206 = $-122 Mil.
Cash Flow from Operations was -74 + 12.797 + -25.561 + -0.236 = $-87 Mil.
Revenue was 4354 + 3485.673 + 2619.448 + 2418.619 = $12,878 Mil.
Gross Profit was 1015 + 787.291 + 632.743 + 546.269 = $2,981 Mil.
Total Assets at the begining of this year (Mar13) was $3,792 Mil.
Total Assets was $7,111 Mil.
Long-Term Debt was $1,539 Mil.
Total Current Assets was $4,245 Mil.
Total Current Liabilities was $2,721 Mil.
Net Income was -7 + -7.205 + -61.916 + -57.382 = $-134 Mil.

Revenue was 2718 + 2623.108 + 2692.933 + 2507.15 = $10,541 Mil.
Gross Profit was 660 + 606.729 + 662.672 + 572.196 = $2,502 Mil.
Total Assets at the begining of last year (Mar12) was $4,125 Mil.
Total Assets was $3,792 Mil.
Long-Term Debt was $480 Mil.
Total Current Assets was $2,497 Mil.
Total Current Liabilities was $1,859 Mil.

Profitability

Q1. 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.

Office Depot Inc's current net income was -122. ==> Negative ==> Score 0.

Q2. 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.

Office Depot Inc's current cash flow from operations was -87. ==> Negative ==> Score 0.

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/Total Assets at the beginning of this year (Mar13)
=-122.345/3791.647
=-0.03226698

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=-133.503/4125.149
=-0.03236319

Office Depot Inc's return on assets of this year was -0.03226698. Office Depot Inc's return on assets of last year was -0.03236319. ==> 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.

Office Depot Inc's current net income was -122. Office Depot Inc's current cash flow from operations was -87. ==> -87 > -122 ==> 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)=Long-Term Debt/Total Assets
=1539/7111
=0.21642526

Gearing (Last Year)=Long-Term Debt/Total Assets
=479.82/3791.647
=0.12654659

Office Depot Inc's gearing of this year was 0.21642526. Office Depot Inc's gearing of last year was 0.12654659. ==> 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)=Total Current Assets/Total Current Liabilities
=4245/2721
=1.5600882

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2497.11/1859.328
=1.34301748

Office Depot Inc's current ratio of this year was 1.5600882. Office Depot Inc's current ratio of last year was 1.34301748. ==> 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.

Office Depot Inc's number of shares in issue this year was 530. Office Depot Inc's number of shares in issue last year was 369. ==> 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)=Gross Profit/Revenue
=2981.303/12877.74
=0.23150825

Gross Margin (Last Year)=Gross Profit/Revenue
=2501.597/10541.191
=0.23731635

Office Depot Inc's gross margin of this year was 0.23150825. Office Depot Inc's gross margin of last year was 0.23731635. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Mar13)
=12877.74/3791.647
=3.39634465

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=10541.191/4125.149
=2.55534794

Office Depot Inc's asset turnover of this year was 3.39634465. Office Depot Inc's asset turnover of last year was 2.55534794. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Office Depot 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Office Depot Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111000100
Q2 1111111110
Q3 0010011101
Q4 1111111110
Q5 1011000010
Q6 0001010101
Q7 0111100000
Q8 1010011100
Q9 0010011111
F-score 5486365743

Office Depot Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1110000100
Q2 1111111000
Q3 1110000111
Q4 1111111001
Q5 0001111000
Q6 1110000111
Q7 1000001100
Q8 1000000000
Q9 1111111011
F-score 8664445434
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