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Richardson Electronics (NAS:RELL)
Piotroski F-Score
5 (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

Richardson Electronics has an F-score of 5 indicating the company's financial situation is typical for a stable company.

RELL' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 5

2
8

During the past 13 years, the highest Piotroski F-Score of Richardson Electronics was 8. 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 -2.475 + -0.083 + -1.057 + -2.198 = $-5.8 Mil.
Cash Flow from Operations was 6.05 + -0.328 + -2.008 + -5.706 = $-2.0 Mil.
Revenue was 35.383 + 34.699 + 33.841 + 33.471 = $137.4 Mil.
Gross Profit was 10.164 + 10.658 + 10.462 + 9.8 = $41.1 Mil.
Average Total Assets from the begining of this year (Feb14)
to the end of this year (Feb15) was
(205.027 + 203.545 + 200.905 + 194.286 + 183.088) / 5 = $197.3702 Mil.
Total Assets at the begining of this year (Feb14) was $205.0 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $160.0 Mil.
Total Current Liabilities was $19.5 Mil.
Net Income was -0.181 + 1.968 + 0.524 + -0.532 = $1.8 Mil.

Revenue was 35.183 + 34.257 + 35.436 + 32.884 = $137.8 Mil.
Gross Profit was 10.247 + 10.192 + 11.007 + 9.651 = $41.1 Mil.
Average Total Assets from the begining of last year (Feb13)
to the end of last year (Feb14) was
(221.299 + 217.318 + 207.8 + 206.696 + 205.027) / 5 = $211.628 Mil.
Total Assets at the begining of last year (Feb13) was $221.3 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $192.7 Mil.
Total Current Liabilities was $18.7 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.

Richardson Electronics's current net income (TTM) was -5.8. ==> Negative ==> Score 0.

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.

Richardson Electronics's current cash flow from operations (TTM) was -2.0. ==> Negative ==> Score 0.

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)
=-5.813/205.027
=-0.02835236

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Feb13)
=1.779/221.299
=0.0080389

Richardson Electronics's return on assets of this year was -0.02835236. Richardson Electronics's return on assets of last year was 0.0080389. ==> Last year is higher ==> Score 0.

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.

Richardson Electronics's current net income (TTM) was -5.8. Richardson Electronics's current cash flow from operations (TTM) was -2.0. ==> -2.0 > -5.8 ==> CFROA > ROA ==> Score 1.

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
=0/197.3702
=0

Gearing (Last Year: Feb14)=Long-Term Debt/Average Total Assets from Feb13 to Feb14
=0/211.628
=0

Richardson Electronics's gearing of this year was 0. Richardson Electronics's gearing of last year was 0. ==> 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
=159.963/19.46
=8.2200925

Current Ratio (Last Year: Feb14)=Total Current Assets/Total Current Liabilities
=192.71/18.676
=10.3185907

Richardson Electronics's current ratio of this year was 8.2200925. Richardson Electronics's current ratio of last year was 10.3185907. ==> 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.

Richardson Electronics's number of shares in issue this year was 13.7. Richardson Electronics's number of shares in issue last year was 14.1. ==> 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
=41.084/137.394
=0.29902325

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=41.097/137.76
=0.29832317

Richardson Electronics's gross margin of this year was 0.29902325. Richardson Electronics's gross margin of last year was 0.29832317. ==> 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 (Feb14)
=137.394/205.027
=0.67012637

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Feb13)
=137.76/221.299
=0.6225062

Richardson Electronics's asset turnover of this year was 0.67012637. Richardson Electronics's asset turnover of last year was 0.6225062. ==> 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
=0+0+0+1+1+0+1+1+1
=5

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

Richardson Electronics 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.

Richardson Electronics Annual Data

May05May06May07May08May09May10May11May12May13May14
Question 1 0010011110
Question 2 0101111011
Question 3 0110011000
Question 4 1101110011
Question 5 1010011111
Question 6 0001101101
Question 7 0101000111
Question 8 0101010101
Question 9 0100101011
F-score 2635466567

Richardson Electronics Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
Question 1 1111110000
Question 2 1111111110
Question 3 0000000000
Question 4 0111111111
Question 5 1111111111
Question 6 1100111000
Question 7 1110111111
Question 8 0000111111
Question 9 0111111111
F-score 5765887665
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