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Pier 1 Imports Inc (NYSE:PIR)
Piotroski F-Score
5 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Pier 1 Imports Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

PIR' s 10-Year Piotroski F-Score Range
Min: 1   Max: 9
Current: 5

1
9

During the past 13 years, the highest Piotroski F-Score of Pier 1 Imports Inc was 9. The lowest was 1. 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 (Feb15) TTM:Last Year (Feb14) TTM:
Net Income was 15.055 + 9.158 + 17.86 + 33.089 = $75 Mil.
Cash Flow from Operations was 27.133 + -97.702 + 24.36 + 111.9 = $66 Mil.
Revenue was 419.059 + 418.622 + 484.501 + 543.6 = $1,866 Mil.
Gross Profit was 167.714 + 162.637 + 204.913 + 214.442 = $750 Mil.
Average Total Assets from the begining of this year (Feb14)
to the end of this year (Feb15) was
(803.623 + 945.673 + 885.309 + 921.383 + 910.204) / 5 = $893.2384 Mil.
Total Assets at the begining of this year (Feb14) was $804 Mil.
Long-Term Debt was $205 Mil.
Total Current Assets was $654 Mil.
Total Current Liabilities was $289 Mil.
Net Income was 20.347 + 17.834 + 26.758 + 42.592 = $108 Mil.

Revenue was 394.853 + 395.641 + 465.462 + 515.786 = $1,772 Mil.
Gross Profit was 167.597 + 161.299 + 202.23 + 214.436 = $746 Mil.
Average Total Assets from the begining of last year (Feb13)
to the end of last year (Feb14) was
(857.215 + 895.946 + 866.263 + 872.315 + 803.623) / 5 = $859.0724 Mil.
Total Assets at the begining of last year (Feb13) was $857 Mil.
Long-Term Debt was $10 Mil.
Total Current Assets was $577 Mil.
Total Current Liabilities was $266 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.

Pier 1 Imports Inc's current net income (TTM) was 75. ==> 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.

Pier 1 Imports Inc's current cash flow from operations (TTM) was 66. ==> 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 (Feb14)
=75.162/803.623
=0.09352893

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Feb13)
=107.531/857.215
=0.12544228

Pier 1 Imports Inc's return on assets of this year was 0.09352893. Pier 1 Imports Inc's return on assets of last year was 0.12544228. ==> 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.

Pier 1 Imports Inc's current net income (TTM) was 75. Pier 1 Imports Inc's current cash flow from operations (TTM) was 66. ==> 66 <= 75 ==> CFROA <= ROA ==> Score 0.

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: Feb15)=Long-Term Debt/Average Total Assets from Feb14 to Feb15
=204.746/893.2384
=0.22921764

Gearing (Last Year: Feb14)=Long-Term Debt/Average Total Assets from Feb13 to Feb14
=9.5/859.0724
=0.01105844

Pier 1 Imports Inc's gearing of this year was 0.22921764. Pier 1 Imports Inc's gearing of last year was 0.01105844. ==> Last year is lower than this year ==> Score 0.

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: Feb15)=Total Current Assets/Total Current Liabilities
=654.163/288.813
=2.26500538

Current Ratio (Last Year: Feb14)=Total Current Assets/Total Current Liabilities
=576.506/265.969
=2.1675684

Pier 1 Imports Inc's current ratio of this year was 2.26500538. Pier 1 Imports Inc's current ratio of last year was 2.1675684. ==> 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.

Pier 1 Imports Inc's number of shares in issue this year was 89.4. Pier 1 Imports Inc's number of shares in issue last year was 104.2. ==> 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
=749.706/1865.782
=0.40181865

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=745.562/1771.742
=0.42080732

Pier 1 Imports Inc's gross margin of this year was 0.40181865. Pier 1 Imports Inc's gross margin of last year was 0.42080732. ==> 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 (Feb14)
=1865.782/803.623
=2.32171304

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Feb13)
=1771.742/857.215
=2.06685837

Pier 1 Imports Inc's asset turnover of this year was 2.32171304. Pier 1 Imports Inc's asset turnover of last year was 2.06685837. ==> 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
=1+1+0+0+0+1+1+0+1
=5

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

Pier 1 Imports Inc 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.

Pier 1 Imports Inc Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
Question 1 0000111111
Question 2 0000111111
Question 3 0010111000
Question 4 0111010010
Question 5 0000111100
Question 6 1000110101
Question 7 1000001111
Question 8 0000111100
Question 9 0010110101
F-score 2131786745

Pier 1 Imports Inc Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
Question 1 1111111111
Question 2 1111111111
Question 3 1000000000
Question 4 0011111100
Question 5 1111110000
Question 6 1101000001
Question 7 1111111111
Question 8 1111100000
Question 9 1110000001
F-score 8777654435
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