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Staples Inc (NAS:SPLS)
Piotroski F-Score
6 (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

Staples Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

SPLS' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 6

4
9

During the past 13 years, the highest Piotroski F-Score of Staples 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 (Oct15) TTM:Last Year (Oct14) TTM:
Net Income was 0 + 59 + 36 + 198 = $293 Mil.
Cash Flow from Operations was 134.938 + 300 + 0 + 403 = $838 Mil.
Revenue was 0 + 5262 + 4937 + 5593 = $15,792 Mil.
Gross Profit was 0 + 1347 + 1264 + 1522 = $4,133 Mil.
Average Total Assets from the begining of this year (Oct14)
to the end of this year (Oct15) was
(11304.403 + 10313.728 + 10438 + 10326 + 10318) / 5 = $10540.0262 Mil.
Total Assets at the begining of this year (Oct14) was $11,304 Mil.
Long-Term Debt was $1,016 Mil.
Total Current Assets was $5,439 Mil.
Total Current Liabilities was $3,325 Mil.
Net Income was 0 + 96 + 82 + 217 = $395 Mil.

Revenue was 0 + 5654 + 5220 + 5962 = $16,836 Mil.
Gross Profit was 0 + 1410 + 1308 + 1596 = $4,314 Mil.
Average Total Assets from the begining of last year (Oct13)
to the end of last year (Oct14) was
(12179.506 + 11174.876 + 11443.46 + 11278.024 + 11304.403) / 5 = $11476.0538 Mil.
Total Assets at the begining of last year (Oct13) was $12,180 Mil.
Long-Term Debt was $1,026 Mil.
Total Current Assets was $5,599 Mil.
Total Current Liabilities was $3,621 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.

Staples Inc's current net income (TTM) was 293. ==> Positive ==> Score 1.

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.

Staples Inc's current cash flow from operations (TTM) was 838. ==> Positive ==> Score 1.

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)
=293/11304.403
=0.0259191

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct13)
=395/12179.506
=0.03243153

Staples Inc's return on assets of this year was 0.0259191. Staples Inc's return on assets of last year was 0.03243153. ==> Last year is higher ==> Score 0.

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.

Staples Inc's current net income (TTM) was 293. Staples Inc's current cash flow from operations (TTM) was 838. ==> 838 > 293 ==> CFROA > ROA ==> Score 1.

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
=1016/10540.0262
=0.09639445

Gearing (Last Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=1025.74/11476.0538
=0.0893809

Staples Inc's gearing of this year was 0.09639445. Staples Inc's gearing of last year was 0.0893809. ==> 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
=5439/3325
=1.63578947

Current Ratio (Last Year: Oct14)=Total Current Assets/Total Current Liabilities
=5598.635/3620.722
=1.54627585

Staples Inc's current ratio of this year was 1.63578947. Staples Inc's current ratio of last year was 1.54627585. ==> 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.

Staples Inc's number of shares in issue this year was 646. Staples Inc's number of shares in issue last year was 644. ==> 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
=4133/15792
=0.26171479

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4314/16836
=0.25623664

Staples Inc's gross margin of this year was 0.26171479. Staples Inc's gross margin of last year was 0.25623664. ==> 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)
=15792/11304.403
=1.3969778

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct13)
=16836/12179.506
=1.38232207

Staples Inc's asset turnover of this year was 1.3969778. Staples Inc's asset turnover of last year was 1.38232207. ==> 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
=1+1+0+1+0+1+0+1+1
=6

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

Staples 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.

Staples Inc Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
Question 1 1111111011
Question 2 1111111111
Question 3 1100011011
Question 4 1111111111
Question 5 1110011100
Question 6 0010101011
Question 7 1110011111
Question 8 1110011000
Question 9 1111001011
F-score 8884479477

Staples Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Question 1 0111111111
Question 2 1111111111
Question 3 0111101110
Question 4 1111111111
Question 5 1100000000
Question 6 0011111111
Question 7 1111111110
Question 8 0000000011
Question 9 1111101111
F-score 5777757786
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