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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 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of Staples 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 (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was 96.21 + 81.875 + 216.792 + -260.351 = $135 Mil.
Cash Flow from Operations was 359.851 + -56.273 + 604.6 + 134.76 = $1,043 Mil.
Revenue was 5654.259 + 5220.103 + 5961.531 + 5656.467 = $22,492 Mil.
Gross Profit was 1410.294 + 1308.043 + 1596.276 + 1486.423 = $5,801 Mil.
Average Total Assets from the begining of this year (Jan14)
to the end of this year (Jan15) was
(11174.876 + 11443.46 + 11278.024 + 11304.403 + 10313.728) / 5 = $11102.8982 Mil.
Total Assets at the begining of this year (Jan14) was $11,175 Mil.
Long-Term Debt was $1,024 Mil.
Total Current Assets was $5,176 Mil.
Total Current Liabilities was $3,291 Mil.
Net Income was 169.927 + 102.531 + 135.228 + 212.383 = $620 Mil.

Revenue was 5814.571 + 5314.724 + 6111.695 + 5873.273 = $23,114 Mil.
Gross Profit was 1511.01 + 1359.496 + 1654.726 + 1507.053 = $6,032 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(12280.005 + 12256.126 + 11999.64 + 12179.506 + 11174.876) / 5 = $11978.0306 Mil.
Total Assets at the begining of last year (Jan13) was $12,280 Mil.
Long-Term Debt was $1,000 Mil.
Total Current Assets was $5,240 Mil.
Total Current Liabilities was $3,368 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 135. ==> 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 1,043. ==> 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 (Jan14)
=134.526/11174.876
=0.01203825

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=620.069/12280.005
=0.0504942

Staples Inc's return on assets of this year was 0.01203825. Staples Inc's return on assets of last year was 0.0504942. ==> 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 135. Staples Inc's current cash flow from operations (TTM) was 1,043. ==> 1,043 > 135 ==> 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: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=1023.997/11102.8982
=0.0922279

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=1000.205/11978.0306
=0.08350329

Staples Inc's gearing of this year was 0.0922279. Staples Inc's gearing of last year was 0.08350329. ==> 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: Jan15)=Total Current Assets/Total Current Liabilities
=5176.423/3290.571
=1.57310783

Current Ratio (Last Year: Jan14)=Total Current Assets/Total Current Liabilities
=5239.558/3368.45
=1.55548041

Staples Inc's current ratio of this year was 1.57310783. Staples Inc's current ratio of last year was 1.55548041. ==> 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 643.2. Staples Inc's number of shares in issue last year was 652.2. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=5801.036/22492.36
=0.2579114

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6032.285/23114.263
=0.26097674

Staples Inc's gross margin of this year was 0.2579114. Staples Inc's gross margin of last year was 0.26097674. ==> Last year's gross margin is higher ==> Score 0.

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 (Jan14)
=22492.36/11174.876
=2.01276148

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=23114.263/12280.005
=1.88226821

Staples Inc's asset turnover of this year was 2.01276148. Staples Inc's asset turnover of last year was 1.88226821. ==> 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+1+0+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 1100011010
Question 4 1111111111
Question 5 1100011100
Question 6 0010101011
Question 7 1111001111
Question 8 1110011000
Question 9 1101001111
F-score 8865469576

Staples Inc Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 0000111111
Question 2 1111111111
Question 3 0000111110
Question 4 1111111111
Question 5 0111100000
Question 6 1000011111
Question 7 1111111111
Question 8 0000000000
Question 9 1111111101
F-score 5555777766
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