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

Pep Boys - Manny Moe & Jack has an F-score of 6 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 (Apr14) TTM:Last Year (Apr13) TTM:
Net Income was 1.608 + -3.331 + 0.964 + 5.368 = $5 Mil.
Cash Flow from Operations was 11.454 + -3.45 + 31.656 + 21.763 = $61 Mil.
Revenue was 538.821 + 495.733 + 507.042 + 527.619 = $2,069 Mil.
Gross Profit was 133.126 + 104.016 + 122.812 + 138.708 = $499 Mil.
Total Assets at the begining of this year (Apr13) was $1,596 Mil.
Total Assets was $1,593 Mil.
Long-Term Debt was $203 Mil.
Total Current Assets was $817 Mil.
Total Current Liabilities was $680 Mil.
Net Income was 3.863 + -14.541 + -6.759 + 33.048 = $16 Mil.

Revenue was 536.173 + 530.847 + 509.608 + 525.671 = $2,102 Mil.
Gross Profit was 121.84 + 117.207 + 116.04 + 130.601 = $486 Mil.
Total Assets at the begining of last year (Apr12) was $1,669 Mil.
Total Assets was $1,596 Mil.
Long-Term Debt was $198 Mil.
Total Current Assets was $818 Mil.
Total Current Liabilities was $680 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.

Pep Boys - Manny Moe & Jack's current net income was 5. ==> Positive ==> Score 1.

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.

Pep Boys - Manny Moe & Jack's current cash flow from operations was 61. ==> 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/Total Assets at the beginning of this year (Apr13)
=4.609/1595.928
=0.00288797

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Apr12)
=15.611/1668.533
=0.00935612

Pep Boys - Manny Moe & Jack's return on assets of this year was 0.00288797. Pep Boys - Manny Moe & Jack's return on assets of last year was 0.00935612. ==> Last year is higher ==> Score 0.

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.

Pep Boys - Manny Moe & Jack's current net income was 5. Pep Boys - Manny Moe & Jack's current cash flow from operations was 61. ==> 61 > 5 ==> 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
=202.5/1592.951
=0.12712255

Gearing (Last Year)=Long-Term Debt/Total Assets
=197.5/1595.928
=0.12375245

Pep Boys - Manny Moe & Jack's gearing of this year was 0.12712255. Pep Boys - Manny Moe & Jack's gearing of last year was 0.12375245. ==> 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
=817.246/680.042
=1.20175813

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=817.662/679.513
=1.2033059

Pep Boys - Manny Moe & Jack's current ratio of this year was 1.20175813. Pep Boys - Manny Moe & Jack's current ratio of last year was 1.2033059. ==> Last year's current ratio is higher ==> Score 0.

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.

Pep Boys - Manny Moe & Jack's number of shares in issue this year was 54. Pep Boys - Manny Moe & Jack's number of shares in issue last year was 54. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=498.662/2069.215
=0.24099091

Gross Margin (Last Year)=Gross Profit/Revenue
=485.688/2102.299
=0.23102708

Pep Boys - Manny Moe & Jack's gross margin of this year was 0.24099091. Pep Boys - Manny Moe & Jack's gross margin of last year was 0.23102708. ==> This year's gross margin is higher. ==> Score 1.

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 (Apr13)
=2069.215/1595.928
=1.29655912

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Apr12)
=2102.299/1668.533
=1.25996849

Pep Boys - Manny Moe & Jack's asset turnover of this year was 1.29655912. Pep Boys - Manny Moe & Jack's asset turnover of last year was 1.25996849. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+1+1+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Pep Boys - Manny Moe & Jack 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.

Pep Boys - Manny Moe & Jack Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1000011111
Q2 1011011111
Q3 1010111000
Q4 1011011111
Q5 0011111110
Q6 1101010001
Q7 0111000000
Q8 0010111001
Q9 1010111001
F-score 6275487446

Pep Boys - Manny Moe & Jack Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
Q1 1111110011
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 1111111000
Q6 0010000110
Q7 0001000010
Q8 0000000111
Q9 0100000111
F-score 4555443575
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