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Rite Aid Corp (NYSE:RAD)
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

Rite Aid Corp has an F-score of 5 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: 5

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 (May14) TTM:Last Year (May13) TTM:
Net Income was 41.446 + 55.377 + 71.548 + 32.827 = $201 Mil.
Cash Flow from Operations was 239.748 + 194.128 + 244.006 + 79.465 = $757 Mil.
Revenue was 6465.531 + 6597.459 + 6357.732 + 6278.165 = $25,699 Mil.
Gross Profit was 1802.979 + 1885.716 + 1800.666 + 1816.361 = $7,306 Mil.
Total Assets at the begining of this year (May13) was $6,945 Mil.
Total Assets was $6,947 Mil.
Long-Term Debt was $5,592 Mil.
Total Current Assets was $4,199 Mil.
Total Current Liabilities was $2,556 Mil.
Net Income was 89.662 + 123.087 + 61.871 + -38.765 = $236 Mil.

Revenue was 6293.057 + 6455.245 + 6237.847 + 6230.884 = $25,217 Mil.
Gross Profit was 1820.991 + 2047.763 + 1811.321 + 1710.421 = $7,390 Mil.
Total Assets at the begining of last year (May12) was $7,073 Mil.
Total Assets was $6,945 Mil.
Long-Term Debt was $5,868 Mil.
Total Current Assets was $4,301 Mil.
Total Current Liabilities was $2,478 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.

Rite Aid Corp's current net income was 201. ==> 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.

Rite Aid Corp's current cash flow from operations was 757. ==> 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 (May13)
=201.198/6945.438
=0.02896837

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (May12)
=235.855/7073.132
=0.0333452

Rite Aid Corp's return on assets of this year was 0.02896837. Rite Aid Corp's return on assets of last year was 0.0333452. ==> 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.

Rite Aid Corp's current net income was 201. Rite Aid Corp's current cash flow from operations was 757. ==> 757 > 201 ==> 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
=5591.568/6946.517
=0.80494556

Gearing (Last Year)=Long-Term Debt/Total Assets
=5868.264/6945.438
=0.84490913

Rite Aid Corp's gearing of this year was 0.80494556. Rite Aid Corp's gearing of last year was 0.84490913. ==> This year is lower. ==> 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)=Total Current Assets/Total Current Liabilities
=4198.536/2555.531
=1.64292118

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4300.884/2478.411
=1.7353393

Rite Aid Corp's current ratio of this year was 1.64292118. Rite Aid Corp's current ratio of last year was 1.7353393. ==> 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.

Rite Aid Corp's number of shares in issue this year was 996.6. Rite Aid Corp's number of shares in issue last year was 893.9. ==> There is more number of shares in issue this year. ==> Score 0.

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
=7305.722/25698.887
=0.28428165

Gross Margin (Last Year)=Gross Profit/Revenue
=7390.496/25217.033
=0.29307556

Rite Aid Corp's gross margin of this year was 0.28428165. Rite Aid Corp's gross margin of last year was 0.29307556. ==> 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 (May13)
=25698.887/6945.438
=3.70011035

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (May12)
=25217.033/7073.132
=3.56518626

Rite Aid Corp's asset turnover of this year was 3.70011035. Rite Aid Corp's asset turnover of last year was 3.56518626. ==> 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+1+0+0+0+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Rite Aid Corp 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.

Rite Aid Corp Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Q1 1110000011
Q2 1111101111
Q3 1100010111
Q4 1011111111
Q5 1100000011
Q6 0010110000
Q7 0010000000
Q8 1001000010
Q9 0101011101
F-score 6554343466

Rite Aid Corp Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Q1 0000111111
Q2 1111111111
Q3 1111111110
Q4 1111111111
Q5 0001111011
Q6 0000001100
Q7 0000000000
Q8 0011111100
Q9 1111011111
F-score 4456678765
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