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Peerless Systems Corp (NAS:PRLS)
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

Peerless Systems Corp has an F-score of 6 indicating the company's financial situation is typical for a stable company.

PRLS' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of Peerless Systems Corp was 8. 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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was -0.259 + -0.334 + 0.051 + 0.136 = $-0.41 Mil.
Cash Flow from Operations was 0.174 + 1.92 + -0.928 + -0.413 = $0.75 Mil.
Revenue was 0.92 + 0.737 + 0.547 + 0.569 = $2.77 Mil.
Gross Profit was 0.834 + 0.721 + 0.469 + 0.547 = $2.57 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(13.284 + 13.033 + 14.066 + 12.794 + 12.81) / 5 = $13.20 Mil.
Total Assets as of Jul13 was $13.28 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $12.80 Mil.
Total Current Liabilities was $0.23 Mil.
Net Income was 1.397 + 0.23 + 0.135 + -0.399 = $1.36 Mil.

Revenue was 0.482 + 0.946 + 1.101 + 0.847 = $3.38 Mil.
Gross Profit was 0.45 + 0.796 + 0.973 + 0.804 = $3.02 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(14.983 + 13.817 + 13.917 + 14.159 + 13.284) / 5 = $14.03 Mil.
Total Assets as of Jul12 was $14.98 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $13.28 Mil.
Total Current Liabilities was $0.41 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Peerless Systems Corp's current net income (ttm) was -0.41. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Peerless Systems Corp's current cash flow from operations (ttm) was 0.75. ==> 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 (TTM)/Beginning of This Year Total Assets (Jul13)
=-0.406/13.284
=-0.03056308

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jul12)
=1.363/14.983
=0.09096977

Peerless Systems Corp's return on assets of this year was -0.03056308. Peerless Systems Corp's return on assets of last year was 0.09096977. ==> 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.

Peerless Systems Corp's current net income (ttm) was -0.41. Peerless Systems Corp's current cash flow from operations (ttm) was 0.75. ==> 0.75 > -0.41 ==> 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: Jul14)=Long-Term Debt/Average Total Assets from Jul13 to Jul14
=0/13.1974
=0

Gearing (Last Year: Jul13)=Long-Term Debt/Average Total Assets from Jul12 to Jul13
=0/14.032
=0

Peerless Systems Corp's gearing of this year was 0. Peerless Systems Corp's gearing of last year was 0. ==> This year is lower or equal to last year. ==> Score 1.

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: Jul14)=Total Current Assets/Total Current Liabilities
=12.804/0.231
=55.42857143

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=13.278/0.41
=32.38536585

Peerless Systems Corp's current ratio of this year was 55.42857143. Peerless Systems Corp's current ratio of last year was 32.38536585. ==> 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.

Peerless Systems Corp's number of shares in issue this year was 2.6. Peerless Systems Corp's number of shares in issue last year was 2.8. ==> 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: TTM)=Gross Profit/Revenue
=2.571/2.773
=0.92715471

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3.023/3.376
=0.89543839

Peerless Systems Corp's gross margin of this year was 0.92715471. Peerless Systems Corp's gross margin of last year was 0.89543839. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Jul13)
=2.773/13.284
=0.20874737

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jul12)
=3.376/14.983
=0.22532203

Peerless Systems Corp's asset turnover of this year was 0.20874737. Peerless Systems Corp's asset turnover of last year was 0.22532203. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Peerless Systems Corp 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, Altman Z-Score, Beneish M-Score


Historical Data

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

Peerless Systems Corp Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 0111111110
Q2 0111011101
Q3 0101100110
Q4 1110000001
Q5 1111111111
Q6 0111110010
Q7 0001111111
Q8 1011010111
Q9 1100001101
F-score 4767565766

Peerless Systems Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1111110000
Q2 0000111111
Q3 1111010000
Q4 0000011111
Q5 1111111111
Q6 1101101011
Q7 0011111111
Q8 1111000111
Q9 1110111110
F-score 6666676676
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