Switch to:
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: 2   Max: 7
Current: 6

2
7

During the past 13 years, the highest Piotroski F-Score of Rite Aid Corp was 7. The lowest was 2. 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 (Feb15) TTM:Last Year (Feb14) TTM:
Net Income was 41.446 + 127.849 + 104.846 + 1835.032 = $2,109 Mil.
Cash Flow from Operations was 239.748 + 122.483 + 111.728 + 175 = $649 Mil.
Revenue was 6465.531 + 6522.584 + 6692.333 + 6847.929 = $26,528 Mil.
Gross Profit was 1802.979 + 1894.579 + 1923.313 + 1955.861 = $7,577 Mil.
Average Total Assets from the begining of this year (Feb14)
to the end of this year (Feb15) was
(6944.871 + 6946.517 + 6959.344 + 7185.986 + 8863.252) / 5 = $7379.994 Mil.
Total Assets at the begining of this year (Feb14) was $6,945 Mil.
Long-Term Debt was $5,545 Mil.
Total Current Assets was $4,222 Mil.
Total Current Liabilities was $2,485 Mil.
Net Income was 89.662 + 32.827 + 71.548 + 55.377 = $249 Mil.

Revenue was 6293.057 + 6278.165 + 6357.732 + 6597.459 = $25,526 Mil.
Gross Profit was 1820.991 + 1816.361 + 1800.666 + 1885.716 = $7,324 Mil.
Average Total Assets from the begining of last year (Feb13)
to the end of last year (Feb14) was
(7078.719 + 6945.438 + 7168.99 + 7138.167 + 6944.871) / 5 = $7055.237 Mil.
Total Assets at the begining of last year (Feb13) was $7,079 Mil.
Long-Term Debt was $5,708 Mil.
Total Current Assets was $4,285 Mil.
Total Current Liabilities was $2,507 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 2,109. ==> 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 649. ==> 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)
=2109.173/6944.871
=0.30370226

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Feb13)
=249.414/7078.719
=0.03523434

Rite Aid Corp's return on assets of this year was 0.30370226. Rite Aid Corp's return on assets of last year was 0.03523434. ==> 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 2,109. Rite Aid Corp's current cash flow from operations (TTM) was 649. ==> 649 <= 2,109 ==> 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
=5544.567/7379.994
=0.75129695

Gearing (Last Year: Feb14)=Long-Term Debt/Average Total Assets from Feb13 to Feb14
=5707.969/7055.237
=0.80904001

Rite Aid Corp's gearing of this year was 0.75129695. Rite Aid Corp's gearing of last year was 0.80904001. ==> This year is lower or equal to last year. ==> Score 1.

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
=4221.758/2485
=1.69889658

Current Ratio (Last Year: Feb14)=Total Current Assets/Total Current Liabilities
=4285.125/2507.452
=1.70895594

Rite Aid Corp's current ratio of this year was 1.69889658. Rite Aid Corp's current ratio of last year was 1.70895594. ==> Last year's current ratio is higher ==> Score 0.

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 1014.4. Rite Aid Corp's number of shares in issue last year was 1057.9. ==> 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
=7576.732/26528.377
=0.28560858

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=7323.734/25526.413
=0.28690807

Rite Aid Corp's gross margin of this year was 0.28560858. Rite Aid Corp's gross margin of last year was 0.28690807. ==> 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)
=26528.377/6944.871
=3.81985166

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Feb13)
=25526.413/7078.719
=3.60607802

Rite Aid Corp's asset turnover of this year was 3.81985166. Rite Aid Corp's asset turnover of last year was 3.60607802. ==> 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+1+0+1+0+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

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
Question 1 0111111111
Question 2 1111111111
Question 3 1111110011
Question 4 1111111110
Question 5 1000011111
Question 6 0001100010
Question 7 0000000001
Question 8 1111100000
Question 9 1011111011
F-score 6567765476
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK