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Ross Stores Inc (NAS:ROST)
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

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

ROST' s 10-Year Piotroski F-Score Range
Min: 5   Max: 9
Current: 5

5
9

During the past 13 years, the highest Piotroski F-Score of Ross Stores Inc was 9. The lowest was 5. And the median was 7.


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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was 171.618 + 217.953 + 243.913 + 239.561 = $873 Mil.
Cash Flow from Operations was 148.893 + 340.782 + 504.577 + 237.214 = $1,231 Mil.
Revenue was 2398.122 + 2741.04 + 2680.593 + 2729.566 = $10,549 Mil.
Gross Profit was 651.887 + 748.939 + 772.409 + 785.549 = $2,959 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(3908.485 + 3946.723 + 3896.797 + 4151.594 + 4167.832) / 5 = $4,014 Mil.
Total Assets was $4,168 Mil.
Long-Term Debt was $150 Mil.
Total Current Assets was $2,024 Mil.
Total Current Liabilities was $1,532 Mil.
Net Income was 159.524 + 236.602 + 234.612 + 213.121 = $844 Mil.

Revenue was 2262.723 + 2760.646 + 2539.914 + 2551.277 = $10,115 Mil.
Gross Profit was 613.726 + 766.985 + 741.103 + 727.5 = $2,849 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(3560.163 + 3647.937 + 3670.561 + 3842.761 + 3908.485) / 5 = $3,726 Mil.
Total Assets was $3,908 Mil.
Long-Term Debt was $150 Mil.
Total Current Assets was $2,098 Mil.
Total Current Liabilities was $1,472 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Ross Stores Inc's current net income (ttm) was 873. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Ross Stores Inc's current cash flow from operations (ttm) was 1,231. ==> 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 (TTM)/Average Total Assets from Jul13 to Jul14
=873.045/4014.2862
=0.21748449

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jul12 to Jul13
=843.859/3725.9814
=0.22647966

Ross Stores Inc's return on assets of this year was 0.21748449. Ross Stores Inc's return on assets of last year was 0.22647966. ==> 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.

Ross Stores Inc's current net income (ttm) was 873. Ross Stores Inc's current cash flow from operations (ttm) was 1,231. ==> 1,231 > 873 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul14)=Long-Term Debt/Total Assets
=150/4167.832
=0.03598993

Gearing (Last Year: Jul13)=Long-Term Debt/Total Assets
=150/3908.485
=0.03837804

Ross Stores Inc's gearing of this year was 0.03598993. Ross Stores Inc's gearing of last year was 0.03837804. ==> This year is lower or equal to last year. ==> 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: Jul14)=Total Current Assets/Total Current Liabilities
=2023.865/1532.121
=1.32095637

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=2098.477/1471.814
=1.42577595

Ross Stores Inc's current ratio of this year was 1.32095637. Ross Stores Inc's current ratio of last year was 1.42577595. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Ross Stores Inc's number of shares in issue this year was 209.7. Ross Stores Inc's number of shares in issue last year was 216.6. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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: TTM)=Gross Profit/Revenue
=2958.784/10549.321
=0.28047151

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2849.314/10114.56
=0.2817042

Ross Stores Inc's gross margin of this year was 0.28047151. Ross Stores Inc's gross margin of last year was 0.2817042. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jul13 to Jul14
=10549.321/4014.2862
=2.62794442

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jul12 to Jul13
=10114.56/3725.9814
=2.71460292

Ross Stores Inc's asset turnover of this year was 2.62794442. Ross Stores Inc's asset turnover of last year was 2.71460292. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+0+1+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Ross Stores Inc 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, Altman Z-Score, Beneish M-Score


Historical Data

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

Ross Stores Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 0111111111
Q4 1111111111
Q5 1101011111
Q6 1010011000
Q7 1111111111
Q8 0011111111
Q9 1111111111
F-score 7788799888

Ross Stores Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1111111111
Q2 1111111111
Q3 1111111000
Q4 1111111111
Q5 1111111111
Q6 0000000000
Q7 1111111111
Q8 1111111100
Q9 1111000000
F-score 8888777655
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