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Pep Boys - Manny Moe & Jack (NYSE:PBY)
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

Pep Boys - Manny Moe & Jack has an F-score of 5 indicating the company's financial situation is typical for a stable company.

PBY' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 5

2
8

During the past 13 years, the highest Piotroski F-Score of Pep Boys - Manny Moe & Jack was 8. The lowest was 2. 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 (Apr15) TTM:Last Year (Apr14) TTM:
Net Income was -0.273 + -1.964 + -26.668 + 11.893 = $-17 Mil.
Cash Flow from Operations was 4.104 + -3.933 + 15.819 + 33.829 = $50 Mil.
Revenue was 525.773 + 517.584 + 502.424 + 542.261 = $2,088 Mil.
Gross Profit was 124.297 + 118.334 + 99.684 + 133.767 = $476 Mil.
Average Total Assets from the begining of this year (Apr14)
to the end of this year (Apr15) was
(1592.951 + 1580.732 + 1572.401 + 1541.741 + 1520.728) / 5 = $1561.7106 Mil.
Total Assets at the begining of this year (Apr14) was $1,593 Mil.
Long-Term Debt was $194 Mil.
Total Current Assets was $804 Mil.
Total Current Liabilities was $645 Mil.
Net Income was 5.368 + 0.964 + -3.331 + 1.608 = $5 Mil.

Revenue was 527.619 + 507.042 + 495.733 + 538.821 = $2,069 Mil.
Gross Profit was 138.708 + 122.812 + 104.016 + 133.126 = $499 Mil.
Average Total Assets from the begining of last year (Apr13)
to the end of last year (Apr14) was
(1595.928 + 1583.329 + 1589.247 + 1605.481 + 1592.951) / 5 = $1593.3872 Mil.
Total Assets at the begining of last year (Apr13) was $1,596 Mil.
Long-Term Debt was $203 Mil.
Total Current Assets was $817 Mil.
Total Current Liabilities was $680 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.

Pep Boys - Manny Moe & Jack's current net income (TTM) was -17. ==> Negative ==> Score 0.

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.

Pep Boys - Manny Moe & Jack's current cash flow from operations (TTM) was 50. ==> 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 (Apr14)
=-17.012/1592.951
=-0.01067955

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Apr13)
=4.609/1595.928
=0.00288797

Pep Boys - Manny Moe & Jack's return on assets of this year was -0.01067955. Pep Boys - Manny Moe & Jack's return on assets of last year was 0.00288797. ==> 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.

Pep Boys - Manny Moe & Jack's current net income (TTM) was -17. Pep Boys - Manny Moe & Jack's current cash flow from operations (TTM) was 50. ==> 50 > -17 ==> 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: Apr15)=Long-Term Debt/Average Total Assets from Apr14 to Apr15
=193.5/1561.7106
=0.1239026

Gearing (Last Year: Apr14)=Long-Term Debt/Average Total Assets from Apr13 to Apr14
=202.5/1593.3872
=0.12708775

Pep Boys - Manny Moe & Jack's gearing of this year was 0.1239026. Pep Boys - Manny Moe & Jack's gearing of last year was 0.12708775. ==> 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: Apr15)=Total Current Assets/Total Current Liabilities
=803.714/644.641
=1.24676215

Current Ratio (Last Year: Apr14)=Total Current Assets/Total Current Liabilities
=817.246/680.042
=1.20175813

Pep Boys - Manny Moe & Jack's current ratio of this year was 1.24676215. Pep Boys - Manny Moe & Jack's current ratio of last year was 1.20175813. ==> 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.

Pep Boys - Manny Moe & Jack's number of shares in issue this year was 54.2. Pep Boys - Manny Moe & Jack's number of shares in issue last year was 54. ==> 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
=476.082/2088.042
=0.22800403

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=498.662/2069.215
=0.24099091

Pep Boys - Manny Moe & Jack's gross margin of this year was 0.22800403. Pep Boys - Manny Moe & Jack's gross margin of last year was 0.24099091. ==> 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 (Apr14)
=2088.042/1592.951
=1.31080115

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Apr13)
=2069.215/1595.928
=1.29655912

Pep Boys - Manny Moe & Jack's asset turnover of this year was 1.31080115. Pep Boys - Manny Moe & Jack's asset turnover of last year was 1.29655912. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+1+1+0+0+1
=5

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

Pep Boys - Manny Moe & Jack 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.

Pep Boys - Manny Moe & Jack Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
Question 1 0000111110
Question 2 0110111111
Question 3 0101110000
Question 4 0110111111
Question 5 0111111100
Question 6 1010100011
Question 7 1010000011
Question 8 0101110010
Question 9 0101110011
F-score 2654874475

Pep Boys - Manny Moe & Jack Quarterly Data

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
Question 1 1100110000
Question 2 1111111111
Question 3 0000001100
Question 4 1111111111
Question 5 1110000001
Question 6 0001101111
Question 7 0000101110
Question 8 0001110000
Question 9 0001111011
F-score 4435756555
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