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Rite Aid Corp (NYSE:RAD)
Piotroski F-Score
6 (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

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

RAD' 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 Rite Aid Corp was 8. The lowest was 1. 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 (May15) TTM:Last Year (May14) TTM:
Net Income was 127.849 + 104.846 + 1835.032 + 18.836 = $2,087 Mil.
Cash Flow from Operations was 122.483 + 111.728 + 175 + 367.835 = $777 Mil.
Revenue was 6522.584 + 6692.333 + 6847.929 + 6647.561 = $26,710 Mil.
Gross Profit was 1894.579 + 1923.313 + 1955.861 + 1859.53 = $7,633 Mil.
Average Total Assets from the begining of this year (May14)
to the end of this year (May15) was
(6946.517 + 6959.344 + 7185.986 + 8863.252 + 10529.774) / 5 = $8096.9746 Mil.
Total Assets at the begining of this year (May14) was $6,947 Mil.
Long-Term Debt was $7,200 Mil.
Total Current Assets was $5,831 Mil.
Total Current Liabilities was $2,405 Mil.
Net Income was 32.827 + 71.548 + 55.377 + 41.446 = $201 Mil.

Revenue was 6278.165 + 6357.732 + 6597.459 + 6465.531 = $25,699 Mil.
Gross Profit was 1816.361 + 1800.666 + 1885.716 + 1802.979 = $7,306 Mil.
Average Total Assets from the begining of last year (May13)
to the end of last year (May14) was
(6945.438 + 7168.99 + 7138.167 + 6944.871 + 6946.517) / 5 = $7028.7966 Mil.
Total Assets at the begining of last year (May13) was $6,945 Mil.
Long-Term Debt was $5,592 Mil.
Total Current Assets was $4,199 Mil.
Total Current Liabilities was $2,556 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.

Rite Aid Corp's current net income (TTM) was 2,087. ==> 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.

Rite Aid Corp's current cash flow from operations (TTM) was 777. ==> 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 (May14)
=2086.563/6946.517
=0.30037543

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (May13)
=201.198/6945.438
=0.02896837

Rite Aid Corp's return on assets of this year was 0.30037543. Rite Aid Corp's return on assets of last year was 0.02896837. ==> This year is higher. ==> Score 1.

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.

Rite Aid Corp's current net income (TTM) was 2,087. Rite Aid Corp's current cash flow from operations (TTM) was 777. ==> 777 <= 2,087 ==> 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: May15)=Long-Term Debt/Average Total Assets from May14 to May15
=7199.832/8096.9746
=0.88920027

Gearing (Last Year: May14)=Long-Term Debt/Average Total Assets from May13 to May14
=5591.568/7028.7966
=0.79552281

Rite Aid Corp's gearing of this year was 0.88920027. Rite Aid Corp's gearing of last year was 0.79552281. ==> 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: May15)=Total Current Assets/Total Current Liabilities
=5830.847/2404.967
=2.42450187

Current Ratio (Last Year: May14)=Total Current Assets/Total Current Liabilities
=4198.536/2555.531
=1.64292118

Rite Aid Corp's current ratio of this year was 2.42450187. Rite Aid Corp's current ratio of last year was 1.64292118. ==> 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.

Rite Aid Corp's number of shares in issue this year was 1009.2. Rite Aid Corp's number of shares in issue last year was 996.6. ==> 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
=7633.283/26710.407
=0.28577936

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=7305.722/25698.887
=0.28428165

Rite Aid Corp's gross margin of this year was 0.28577936. Rite Aid Corp's gross margin of last year was 0.28428165. ==> This year's gross margin is higher. ==> Score 1.

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 (May14)
=26710.407/6946.517
=3.84515103

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (May13)
=25698.887/6945.438
=3.70011035

Rite Aid Corp's asset turnover of this year was 3.84515103. Rite Aid Corp's asset turnover of last year was 3.70011035. ==> 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+1+0+0+1+0+1+1
=6

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

Rite Aid 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


Historical Data

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

Rite Aid Corp Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
Question 1 1100000111
Question 2 1111011111
Question 3 1000101111
Question 4 0111111110
Question 5 1001000111
Question 6 0101100000
Question 7 0100000000
Question 8 0010000100
Question 9 1010111011
F-score 5544434665

Rite Aid Corp Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
Question 1 1111111111
Question 2 1111111111
Question 3 1111100111
Question 4 1111111100
Question 5 0000111110
Question 6 0011000101
Question 7 0000000010
Question 8 1111000001
Question 9 0111110111
F-score 5677654766
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