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Regional Management Corp (NYSE:RM)
Piotroski F-Score
4 (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

Regional Management Corp has an F-score of 4 indicating the company's financial situation is typical for a stable company.

RM' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 5
Current: 4

4
5

During the past 8 years, the highest Piotroski F-Score of Regional Management Corp was 5. The lowest was 4. And the median was 4.


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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 5.176 + 5.912 + 6.476 + 6.467 = USD 24.0 Mil.
Cash Flow from Operations was 20.269 + 18.117 + 28.208 + 33.314 = USD 99.9 Mil.
Revenue was 51.987 + 52.514 + 57.359 + 58.734 = USD 220.6 Mil.
Gross Profit was 51.987 + 52.514 + 57.359 + 58.734 = USD 220.6 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(626.373 + 609.707 + 642.803 + 691.329 + 712.224) / 5 = USD 656.4872 Mil.
Total Assets at the begining of this year (Dec15) was USD 626.4 Mil.
Long-Term Debt was USD 489.5 Mil.
Total Current Assets was USD 0.0 Mil.
Total Current Liabilities was USD 0.0 Mil.
Net Income was 4.083 + 5.408 + 6.507 + 7.367 = USD 23.4 Mil.

Revenue was 48.92 + 49.069 + 50.761 + 52.335 = USD 201.1 Mil.
Gross Profit was 48.92 + 49.069 + 50.761 + 52.335 = USD 201.1 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(530.27 + 507.742 + 560.981 + 588.966 + 626.373) / 5 = USD 562.8664 Mil.
Total Assets at the begining of last year (Dec14) was USD 530.3 Mil.
Long-Term Debt was USD 408.5 Mil.
Total Current Assets was USD 0.0 Mil.
Total Current Liabilities was USD 0.0 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.

Regional Management Corp's current net income (TTM) was 24.0. ==> 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.

Regional Management Corp's current cash flow from operations (TTM) was 99.9. ==> 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 (Dec15)
=24.031/626.373
=0.03836532

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=23.365/530.27
=0.04406246

Regional Management Corp's return on assets of this year was 0.03836532. Regional Management Corp's return on assets of last year was 0.04406246. ==> 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.

Regional Management Corp's current net income (TTM) was 24.0. Regional Management Corp's current cash flow from operations (TTM) was 99.9. ==> 99.9 > 24.0 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=489.526/656.4872
=0.74567486

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=408.485/562.8664
=0.72572284

Regional Management Corp's gearing of this year was 0.74567486. Regional Management Corp's gearing of last year was 0.72572284. ==> 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: Dec16)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=0/0
=

Regional Management Corp's current ratio of this year was . Regional Management Corp's current ratio of last year was . ==> 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.

Regional Management Corp's number of shares in issue this year was 12.1. Regional Management Corp's number of shares in issue last year was 13.1. ==> 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
=220.594/220.594
=1

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=201.085/201.085
=1

Regional Management Corp's gross margin of this year was 1. Regional Management Corp's gross margin of last year was 1. ==> 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 (Dec15)
=220.594/626.373
=0.35217674

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=201.085/530.27
=0.37921248

Regional Management Corp's asset turnover of this year was 0.35217674. Regional Management Corp's asset turnover of last year was 0.37921248. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+0+0+1+0+0
=4

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

Regional Management Corp has an F-score of 4 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 local exchange's currency.

Regional Management Corp Annual Data

Dec12Dec13Dec14Dec15Dec16
Question 1 11111
Question 2 11111
Question 3 00010
Question 4 11111
Question 5 01100
Question 6 00000
Question 7 00001
Question 8 00000
Question 9 10010
F-score 44454

Regional Management Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 0000011110
Question 4 1111111111
Question 5 1110000000
Question 6 0000000000
Question 7 0000001111
Question 8 0000000000
Question 9 0001111000
F-score 4444456554
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