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Sears Holdings Corp (NAS:SHLD)
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

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

SHLD' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 4

2
9

During the past 12 years, the highest Piotroski F-Score of Sears Holdings Corp was 9. The lowest was 2. 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 (Oct15) TTM:Last Year (Oct14) TTM:
Net Income was -159 + -303 + 208 + -454 = $-708 Mil.
Cash Flow from Operations was 555 + -535 + -297 + -1222 = $-1,499 Mil.
Revenue was 8099 + 5882 + 6211 + 5750 = $25,942 Mil.
Gross Profit was 1978 + 1518 + 1435 + 1262 = $6,193 Mil.
Average Total Assets from the begining of this year (Oct14)
to the end of this year (Oct15) was
(15169 + 13209 + 13290 + 13186 + 12769) / 5 = $13524.6 Mil.
Total Assets at the begining of this year (Oct14) was $15,169 Mil.
Long-Term Debt was $2,288 Mil.
Total Current Assets was $7,219 Mil.
Total Current Liabilities was $6,518 Mil.
Net Income was -358 + -402 + -573 + -548 = $-1,881 Mil.

Revenue was 10593 + 7879 + 8013 + 7207 = $33,692 Mil.
Gross Profit was 2482 + 1828 + 1742 + 1601 = $7,653 Mil.
Average Total Assets from the begining of last year (Oct13)
to the end of last year (Oct14) was
(20209 + 18261 + 16930 + 16438 + 15169) / 5 = $17401.4 Mil.
Total Assets at the begining of last year (Oct13) was $20,209 Mil.
Long-Term Debt was $2,769 Mil.
Total Current Assets was $7,591 Mil.
Total Current Liabilities was $8,414 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.

Sears Holdings Corp's current net income (TTM) was -708. ==> Negative ==> Score 0.

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.

Sears Holdings Corp's current cash flow from operations (TTM) was -1,499. ==> Negative ==> Score 0.

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 (Oct14)
=-708/15169
=-0.04667414

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct13)
=-1881/20209
=-0.09307734

Sears Holdings Corp's return on assets of this year was -0.04667414. Sears Holdings Corp's return on assets of last year was -0.09307734. ==> This year is higher. ==> Score 1.

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.

Sears Holdings Corp's current net income (TTM) was -708. Sears Holdings Corp's current cash flow from operations (TTM) was -1,499. ==> -1,499 <= -708 ==> CFROA <= ROA ==> Score 0.

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: Oct15)=Long-Term Debt/Average Total Assets from Oct14 to Oct15
=2288/13524.6
=0.16917321

Gearing (Last Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=2769/17401.4
=0.15912513

Sears Holdings Corp's gearing of this year was 0.16917321. Sears Holdings Corp's gearing of last year was 0.15912513. ==> 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: Oct15)=Total Current Assets/Total Current Liabilities
=7219/6518
=1.10754833

Current Ratio (Last Year: Oct14)=Total Current Assets/Total Current Liabilities
=7591/8414
=0.90218683

Sears Holdings Corp's current ratio of this year was 1.10754833. Sears Holdings Corp's current ratio of last year was 0.90218683. ==> This year's current ratio is higher. ==> Score 1.

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.

Sears Holdings Corp's number of shares in issue this year was 106.6. Sears Holdings Corp's number of shares in issue last year was 106.4. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=6193/25942
=0.23872485

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=7653/33692
=0.22714591

Sears Holdings Corp's gross margin of this year was 0.23872485. Sears Holdings Corp's gross margin of last year was 0.22714591. ==> This year's gross margin is higher. ==> Score 1.

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 (Oct14)
=25942/15169
=1.71019843

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct13)
=33692/20209
=1.66717799

Sears Holdings Corp's asset turnover of this year was 1.71019843. Sears Holdings Corp's asset turnover of last year was 1.66717799. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

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

Sears Holdings 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 own currency.

Sears Holdings Corp Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
Question 1 1111110000
Question 2 1111110000
Question 3 0000100100
Question 4 1011101111
Question 5 0111101000
Question 6 0101010000
Question 7 0111111101
Question 8 1100100100
Question 9 1001100110
F-score 5657843522

Sears Holdings Corp Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Question 1 0000000000
Question 2 0000000000
Question 3 1100000011
Question 4 1111111100
Question 5 0000000000
Question 6 0100000011
Question 7 0000111100
Question 8 0000000011
Question 9 1111000001
F-score 3422222234
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