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

The zones of discrimination were as such:

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

Pier 1 Imports, Inc. has an F-score of 4 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: 6

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 (Feb14) TTM:Last Year (Feb13) TTM:
Net Income was 42.592 + 26.758 + 17.834 + 20.347 = $108 Mil.
Cash Flow from Operations was 98.07 + 71.603 + -49.479 + 39.038 = $159 Mil.
Revenue was 515.786 + 465.462 + 395.641 + 394.853 = $1,772 Mil.
Gross Profit was 214.436 + 202.23 + 161.299 + 167.597 = $746 Mil.
Total Assets at the begining of this year (Feb13) was $857 Mil.
Total Assets was $804 Mil.
Long-Term Debt was $10 Mil.
Total Current Assets was $577 Mil.
Total Current Liabilities was $266 Mil.
Net Income was 61.704 + 23.685 + 26.231 + 17.825 = $129 Mil.

Revenue was 551.625 + 424.527 + 367.615 + 361.119 = $1,705 Mil.
Gross Profit was 254.978 + 186.259 + 151.549 + 150.275 = $743 Mil.
Total Assets at the begining of last year (Feb12) was $823 Mil.
Total Assets was $857 Mil.
Long-Term Debt was $10 Mil.
Total Current Assets was $659 Mil.
Total Current Liabilities was $248 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.

Pier 1 Imports, Inc.'s current net income was 108. ==> 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.

Pier 1 Imports, Inc.'s current cash flow from operations was 159. ==> 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 (Feb13)
=107.531/857.215
=0.12544228

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Feb12)
=129.445/823.363
=0.15721498

Pier 1 Imports, Inc.'s return on assets of this year was 0.12544228. Pier 1 Imports, Inc.'s return on assets of last year was 0.15721498. ==> 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.

Pier 1 Imports, Inc.'s current net income was 108. Pier 1 Imports, Inc.'s current cash flow from operations was 159. ==> 159 > 108 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=9.5/803.623
=0.01182146

Gearing (Last Year)=Long-Term Debt/Total Assets
=9.5/857.215
=0.0110824

Pier 1 Imports, Inc.'s gearing of this year was 0.01182146. Pier 1 Imports, Inc.'s gearing of last year was 0.0110824. ==> Last year is lower ==> 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
=576.506/265.969
=2.1675684

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=658.934/248.127
=2.65563199

Pier 1 Imports, Inc.'s current ratio of this year was 2.1675684. Pier 1 Imports, Inc.'s current ratio of last year was 2.65563199. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Pier 1 Imports, Inc.'s number of shares in issue this year was 104.2. Pier 1 Imports, Inc.'s number of shares in issue last year was 107.5. ==> There is the same number of shares in issue this year, or fewer. ==> 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
=745.562/1771.742
=0.42080732

Gross Margin (Last Year)=Gross Profit/Revenue
=743.061/1704.886
=0.43584204

Pier 1 Imports, Inc.'s gross margin of this year was 0.42080732. Pier 1 Imports, Inc.'s gross margin of last year was 0.43584204. ==> 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 (Feb13)
=1771.742/857.215
=2.06685837

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Feb12)
=1704.886/823.363
=2.07063713

Pier 1 Imports, Inc.'s asset turnover of this year was 2.06685837. Pier 1 Imports, Inc.'s asset turnover of last year was 2.07063713. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Pier 1 Imports, 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.

Pier 1 Imports, Inc. Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Q1 1000011111
Q2 1000011111
Q3 0001011100
Q4 0011101001
Q5 1000011110
Q6 0100011010
Q7 1100000111
Q8 0000011110
Q9 0001011010
F-score 4213178674

Pier 1 Imports, Inc. Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Q1 1111111111
Q2 1111111111
Q3 1111100000
Q4 1000001111
Q5 1111111110
Q6 0000110100
Q7 1111111111
Q8 1111111110
Q9 1001111000
F-score 8667877760
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