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Sonic Corp (NAS:SONC)
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

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

SONC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 8

3
9

During the past 13 years, the highest Piotroski F-Score of Sonic Corp was 9. The lowest was 3. 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 (May14) TTM:Last Year (May13) TTM:
Net Income was 16.776 + 4.107 + 8.208 + 12.198 = $41.3 Mil.
Cash Flow from Operations was 35.138 + 7.857 + 28.063 + 31.989 = $103.0 Mil.
Revenue was 152.187 + 109.741 + 126.652 + 158.802 = $547.4 Mil.
Gross Profit was 60.47 + 38.23 + 45.269 + 61.527 = $205.5 Mil.
Total Assets at the begining of this year (May13) was $642.5 Mil.
Total Assets was $641.4 Mil.
Long-Term Debt was $453.7 Mil.
Total Current Assets was $99.1 Mil.
Total Current Liabilities was $71.9 Mil.
Net Income was 14.793 + 3.577 + 6.133 + 14.502 = $39.0 Mil.

Revenue was 146.634 + 111.141 + 126.008 + 150.94 = $534.7 Mil.
Gross Profit was 56.578 + 37.336 + 43.935 + 58.743 = $196.6 Mil.
Total Assets at the begining of last year (May12) was $666.7 Mil.
Total Assets was $642.5 Mil.
Long-Term Debt was $460.0 Mil.
Total Current Assets was $110.9 Mil.
Total Current Liabilities was $71.9 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.

Sonic Corp's current net income was 41.3. ==> 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.

Sonic Corp's current cash flow from operations was 103.0. ==> 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 (May13)
=41.289/642.504
=0.06426263

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (May12)
=39.005/666.714
=0.05850335

Sonic Corp's return on assets of this year was 0.06426263. Sonic Corp's return on assets of last year was 0.05850335. ==> 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.

Sonic Corp's current net income was 41.3. Sonic Corp's current cash flow from operations was 103.0. ==> 103.0 > 41.3 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=453.713/641.359
=0.70742439

Gearing (Last Year)=Long-Term Debt/Total Assets
=460.039/642.504
=0.71600955

Sonic Corp's gearing of this year was 0.70742439. Sonic Corp's gearing of last year was 0.71600955. ==> 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)=Total Current Assets/Total Current Liabilities
=99.135/71.937
=1.37808082

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=110.948/71.865
=1.54383914

Sonic Corp's current ratio of this year was 1.37808082. Sonic Corp's current ratio of last year was 1.54383914. ==> 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.

Sonic Corp's number of shares in issue this year was 55.8. Sonic Corp's number of shares in issue last year was 56.8. ==> 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)=Gross Profit/Revenue
=205.496/547.382
=0.37541607

Gross Margin (Last Year)=Gross Profit/Revenue
=196.592/534.723
=0.36765204

Sonic Corp's gross margin of this year was 0.37541607. Sonic Corp's gross margin of last year was 0.36765204. ==> 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 (May13)
=547.382/642.504
=0.85195112

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (May12)
=534.723/666.714
=0.80202756

Sonic Corp's asset turnover of this year was 0.85195112. Sonic Corp's asset turnover of last year was 0.80202756. ==> 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+0+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Sonic Corp 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.

Sonic Corp Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
Q1 1111111111
Q2 1111111111
Q3 1100000111
Q4 1111111111
Q5 1100111111
Q6 0011110111
Q7 1111110011
Q8 1010011011
Q9 1110000110
F-score 8775675798

Sonic Corp Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Q1 1111111111
Q2 1111111111
Q3 0111111111
Q4 1111111111
Q5 0111111111
Q6 1111111100
Q7 1111111101
Q8 0011111111
Q9 1111010111
F-score 6899898978
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