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rue21, Inc. (NAS:RUE)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

rue21, Inc. has an F-score of 4 indicating the company's financial situation is typical for a stable company.

RUE' s 10-Year Piotroski F-Score Range
Min: 4   Max: 6
Current: 4

4
6

During the past 6 years, the highest Piotroski F-Score of rue21, Inc. was 6. The lowest was 4. 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 (Jul13) TTM:Last Year (Jul12) TTM:
Net Income was 1.085 + 10.798 + 15.043 + 8.165 = $35.1 Mil.
Cash Flow from Operations was 12.215 + 20.483 + 35.954 + 10.544 = $79.2 Mil.
Revenue was 229.322 + 224.375 + 269.054 + 225.158 = $947.9 Mil.
Gross Profit was 79.559 + 89.699 + 101.2 + 85.106 = $355.6 Mil.
Total Assets at the begining of this year (Jul12) was $385.5 Mil.
Total Assets was $430.2 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $266.8 Mil.
Total Current Liabilities was $177.9 Mil.
Net Income was 9.09 + 11.602 + 12.92 + 8.741 = $42.4 Mil.

Revenue was 202.059 + 205.615 + 219.896 + 194.761 = $822.3 Mil.
Gross Profit was 79.531 + 79.681 + 80.364 + 71.4 = $311.0 Mil.
Total Assets at the begining of last year (Jul11) was $323.8 Mil.
Total Assets was $385.5 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $249.0 Mil.
Total Current Liabilities was $162.8 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.

rue21, Inc.'s current net income was 35.1. ==> 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.

rue21, Inc.'s current cash flow from operations was 79.2. ==> 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 (Jul12)
=35.091/385.538
=0.09101827

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jul11)
=42.353/323.756
=0.13081765

rue21, Inc.'s return on assets of this year was 0.09101827. rue21, Inc.'s return on assets of last year was 0.13081765. ==> 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.

rue21, Inc.'s current net income was 35.1. rue21, Inc.'s current cash flow from operations was 79.2. ==> 79.2 > 35.1 ==> 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
=0/430.226
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/385.538
=0

rue21, Inc.'s gearing of this year was 0. rue21, Inc.'s gearing of last year was 0. ==> Last year is lower ==> Score 0.

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
=266.781/177.894
=1.49966272

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=249.001/162.8
=1.52949017

rue21, Inc.'s current ratio of this year was 1.49966272. rue21, Inc.'s current ratio of last year was 1.52949017. ==> 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.

rue21, Inc.'s number of shares in issue this year was 24.3. rue21, Inc.'s number of shares in issue last year was 25. ==> 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
=355.564/947.909
=0.37510352

Gross Margin (Last Year)=Gross Profit/Revenue
=310.976/822.331
=0.37816402

rue21, Inc.'s gross margin of this year was 0.37510352. rue21, Inc.'s gross margin of last year was 0.37816402. ==> 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 (Jul12)
=947.909/385.538
=2.45866555

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jul11)
=822.331/323.756
=2.53997146

rue21, Inc.'s asset turnover of this year was 2.45866555. rue21, Inc.'s asset turnover of last year was 2.53997146. ==> 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+0+0+1+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

rue21, Inc. 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 own currency.

rue21, Inc. Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13
Q1 11
Q2 11
Q3 00
Q4 11
Q5 00
Q6 11
Q7 01
Q8 11
Q9 00
F-score 56

rue21, Inc. Quarterly Data

Apr11Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13
Q1 111111111
Q2 111111111
Q3 100000000
Q4 111111111
Q5 000000000
Q6 111111100
Q7 000011111
Q8 111111110
Q9 000000000
F-score 0655566654
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