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

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: 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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 212.383 + 96.21 + 81.875 + 216.792 = $607 Mil.
Cash Flow from Operations was 233.147 + 359.851 + -56.273 + 604.6 = $1,141 Mil.
Revenue was 5873.273 + 5654.259 + 5220.103 + 5961.531 = $22,709 Mil.
Gross Profit was 1507.053 + 1410.294 + 1308.043 + 1596.276 = $5,822 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(12179.506 + 11174.876 + 11443.46 + 11278.024 + 11304.403) / 5 = $11,476 Mil.
Total Assets as of 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.
Net Income was 78.056 + 169.927 + 102.531 + 135.228 = $486 Mil.

Revenue was 6567.98 + 5814.571 + 5314.724 + 6111.695 = $23,809 Mil.
Gross Profit was 1719.409 + 1511.01 + 1359.496 + 1654.726 = $6,245 Mil.
Average Total Assets from the begining of last year (Oct12)
to the end of last year (Oct13) was
(12151.985 + 12280.005 + 12256.126 + 11999.64 + 12179.506) / 5 = $12,173 Mil.
Total Assets as of Oct12 was $12,152 Mil.
Long-Term Debt was $1,001 Mil.
Total Current Assets was $6,249 Mil.
Total Current Liabilities was $4,457 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Staples Inc's current net income (ttm) was 607. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Staples Inc's current cash flow from operations (ttm) was 1,141. ==> 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 (TTM)/Beginning of This Year Total Assets (Oct13)
=607.26/12179.506
=0.04985917

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Oct12)
=485.742/12151.985
=0.03997223

Staples Inc's return on assets of this year was 0.04985917. Staples Inc's return on assets of last year was 0.03997223. ==> 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.

Staples Inc's current net income (ttm) was 607. Staples Inc's current cash flow from operations (ttm) was 1,141. ==> 1,141 > 607 ==> 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: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=1025.74/11476.0538
=0.0893809

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Oct12 to Oct13
=1000.516/12173.4524
=0.08218835

Staples Inc's gearing of this year was 0.0893809. Staples Inc's gearing of last year was 0.08218835. ==> Last year is lower than this year ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=5598.635/3620.722
=1.54627585

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=6249.367/4457.072
=1.40212386

Staples Inc's current ratio of this year was 1.54627585. Staples Inc's current ratio of last year was 1.40212386. ==> This year's current ratio is higher. ==> Score 1.

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.

Staples Inc's number of shares in issue this year was 644.1. Staples Inc's number of shares in issue last year was 655. ==> 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: TTM)=Gross Profit/Revenue
=5821.666/22709.166
=0.25635754

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6244.641/23808.97
=0.26228102

Staples Inc's gross margin of this year was 0.25635754. Staples Inc's gross margin of last year was 0.26228102. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Oct13)
=22709.166/12179.506
=1.86453917

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Oct12)
=23808.97/12151.985
=1.95926591

Staples Inc's asset turnover of this year was 1.86453917. Staples Inc's asset turnover of last year was 1.95926591. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+1+0+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

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, Altman Z-Score, Beneish M-Score


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

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111101
Q2 1111111111
Q3 1110001101
Q4 1111111111
Q5 1110001110
Q6 1001010101
Q7 0111100111
Q8 1111001100
Q9 0110100111
F-score 7886546957

Staples Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 1000011111
Q2 1111111111
Q3 0000011111
Q4 1111111111
Q5 1011110000
Q6 0100001111
Q7 1111111111
Q8 0000000000
Q9 0111111110
F-score 5555577776
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