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Ross Stores, Inc. (NAS:ROST)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

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 6 indicating the company's financial situation is typical for a stable company.

ROST' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 7

4
9

During the past 13 years, the highest Piotroski F-Score of Ross Stores, Inc. was 9. The lowest was 4. 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 (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was 217.953 + 171.618 + 213.121 + 234.612 = $837 Mil.
Cash Flow from Operations was 340.782 + 148.893 + 179.469 + 352.859 = $1,022 Mil.
Revenue was 2741.04 + 2398.122 + 2551.277 + 2539.914 = $10,230 Mil.
Gross Profit was 748.939 + 651.887 + 727.5 + 741.103 = $2,869 Mil.
Total Assets at the begining of this year (Jan13) was $3,671 Mil.
Total Assets was $3,897 Mil.
Long-Term Debt was $150 Mil.
Total Current Assets was $1,867 Mil.
Total Current Liabilities was $1,393 Mil.
Net Income was 236.602 + 159.524 + 182.024 + 208.613 = $787 Mil.

Revenue was 2760.646 + 2262.723 + 2340.855 + 2356.841 = $9,721 Mil.
Gross Profit was 766.985 + 613.726 + 651.212 + 677.714 = $2,710 Mil.
Total Assets at the begining of last year (Jan12) was $3,301 Mil.
Total Assets was $3,671 Mil.
Long-Term Debt was $150 Mil.
Total Current Assets was $2,031 Mil.
Total Current Liabilities was $1,423 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.

Ross Stores, Inc.'s current net income was 837. ==> 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.

Ross Stores, Inc.'s current cash flow from operations was 1,022. ==> 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 (Jan13)
=837.304/3670.561
=0.22811336

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=786.763/3301.209
=0.23832572

Ross Stores, Inc.'s return on assets of this year was 0.22811336. Ross Stores, Inc.'s return on assets of last year was 0.23832572. ==> 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 was 837. Ross Stores, Inc.'s current cash flow from operations was 1,022. ==> 1,022 > 837 ==> 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
=150/3896.797
=0.03849315

Gearing (Last Year)=Long-Term Debt/Total Assets
=150/3670.561
=0.04086569

Ross Stores, Inc.'s gearing of this year was 0.03849315. Ross Stores, Inc.'s gearing of last year was 0.04086569. ==> 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
=1867.159/1393.057
=1.34033209

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2031.427/1422.582
=1.42798587

Ross Stores, Inc.'s current ratio of this year was 1.34033209. Ross Stores, Inc.'s current ratio of last year was 1.42798587. ==> 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.

Ross Stores, Inc.'s number of shares in issue this year was 213.2. Ross Stores, Inc.'s number of shares in issue last year was 220.3. ==> There is the same number of shares in issue this year, or fewer. ==> 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)=Gross Profit/Revenue
=2869.429/10230.353
=0.28048191

Gross Margin (Last Year)=Gross Profit/Revenue
=2709.637/9721.065
=0.2787387

Ross Stores, Inc.'s gross margin of this year was 0.28048191. Ross Stores, Inc.'s gross margin of last year was 0.2787387. ==> This year's gross margin is higher. ==> Score 1.

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 (Jan13)
=10230.353/3670.561
=2.78713608

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=9721.065/3301.209
=2.94469844

Ross Stores, Inc.'s asset turnover of this year was 2.78713608. Ross Stores, Inc.'s asset turnover of last year was 2.94469844. ==> 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+1+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Ross Stores, Inc. 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.

Ross Stores, Inc. Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 0110111110
Q4 1111111111
Q5 1101011111
Q6 1010011000
Q7 1111111111
Q8 0011111111
Q9 0110110010
F-score 6786798786

Ross Stores, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 1111111111
Q2 1111111111
Q3 1111111010
Q4 1111111111
Q5 1111111111
Q6 1000000000
Q7 1111111111
Q8 1111111111
Q9 1011110000
F-score 9788887670
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