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Republic Services Inc (NYSE:RSG)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

Republic Services Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

RSG' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 8

4
8

During the past 13 years, the highest Piotroski F-Score of Republic Services Inc was 8. The lowest was 4. And the median was 6.


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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 132.5 + 236.6 + 171.4 + 56.3 = $597 Mil.
Cash Flow from Operations was 396.4 + 411 + 375.7 + 341.7 = $1,525 Mil.
Revenue was 2073.7 + 2141.5 + 2165.4 + 2111.7 = $8,492 Mil.
Gross Profit was 752.5 + 857.5 + 847.8 + 701.7 = $3,160 Mil.
Total Assets at the begining of this year (Mar13) was $19,639 Mil.
Total Assets was $19,843 Mil.
Long-Term Debt was $7,008 Mil.
Total Current Assets was $1,307 Mil.
Total Current Liabilities was $1,697 Mil.
Net Income was 124.6 + 127 + 152.7 + 149.2 = $554 Mil.

Revenue was 1998.6 + 2028.4 + 2046.9 + 2060.6 = $8,135 Mil.
Gross Profit was 775.5 + 744.9 + 766.4 + 822.1 = $3,109 Mil.
Total Assets at the begining of last year (Mar12) was $19,456 Mil.
Total Assets was $19,639 Mil.
Long-Term Debt was $7,008 Mil.
Total Current Assets was $1,223 Mil.
Total Current Liabilities was $1,675 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.

Republic Services Inc's current net income was 597. ==> 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.

Republic Services Inc's current cash flow from operations was 1,525. ==> 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 (Mar13)
=596.8/19639.1
=0.03038836

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=553.5/19455.9
=0.02844895

Republic Services Inc's return on assets of this year was 0.03038836. Republic Services Inc's return on assets of last year was 0.02844895. ==> This year is higher. ==> Score 1.

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.

Republic Services Inc's current net income was 597. Republic Services Inc's current cash flow from operations was 1,525. ==> 1,525 > 597 ==> 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
=7007.9/19842.5
=0.35317626

Gearing (Last Year)=Long-Term Debt/Total Assets
=7007.8/19639.1
=0.35682898

Republic Services Inc's gearing of this year was 0.35317626. Republic Services Inc's gearing of last year was 0.35682898. ==> 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
=1306.9/1697.4
=0.76994226

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1223.3/1675.3
=0.73019758

Republic Services Inc's current ratio of this year was 0.76994226. Republic Services Inc's current ratio of last year was 0.73019758. ==> This year's current ratio is higher. ==> Score 1.

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.

Republic Services Inc's number of shares in issue this year was 361. Republic Services Inc's number of shares in issue last year was 364.1. ==> 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
=3159.5/8492.3
=0.37204291

Gross Margin (Last Year)=Gross Profit/Revenue
=3108.9/8134.5
=0.38218698

Republic Services Inc's gross margin of this year was 0.37204291. Republic Services Inc's gross margin of last year was 0.38218698. ==> Last year's gross margin is higher ==> Score 0.

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 (Mar13)
=8492.3/19639.1
=0.43241798

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=8134.5/19455.9
=0.41809939

Republic Services Inc's asset turnover of this year was 0.43241798. Republic Services Inc's asset turnover of last year was 0.41809939. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+1+0+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Republic Services Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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.

Republic Services Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1111011101
Q4 1111111111
Q5 0000011001
Q6 1001000111
Q7 1111000111
Q8 1110011000
Q9 0111101101
F-score 7777467758

Republic Services Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 1011000011
Q4 1111111111
Q5 0001001111
Q6 1111111011
Q7 1111111111
Q8 0000000000
Q9 1110001111
F-score 7677557688
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