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Staples Inc (NAS:SPLS)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

Staples Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

SPLS' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Staples Inc was 9. The lowest was 3. 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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was 135.228 + 212.383 + 96.21 + 81.875 = $526 Mil.
Cash Flow from Operations was 527.574 + 233.147 + 359.851 + -56.273 = $1,064 Mil.
Revenue was 6111.695 + 5873.273 + 5654.259 + 5220.103 = $22,859 Mil.
Gross Profit was 1654.726 + 1507.053 + 1410.294 + 1308.043 = $5,880 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(11999.64 + 12179.506 + 11174.876 + 11443.46 + 11278.024) / 5 = $11,615 Mil.
Total Assets was $11,278 Mil.
Long-Term Debt was $1,016 Mil.
Total Current Assets was $5,432 Mil.
Total Current Liabilities was $3,519 Mil.
Net Income was -596.252 + 78.056 + 169.927 + 102.531 = $-246 Mil.

Revenue was 6353.14 + 6567.98 + 5814.571 + 5314.724 = $24,050 Mil.
Gross Profit was 1751.854 + 1719.409 + 1511.01 + 1359.496 = $6,342 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(12993.083 + 12151.985 + 12280.005 + 12256.126 + 11999.64) / 5 = $12,336 Mil.
Total Assets was $12,000 Mil.
Long-Term Debt was $1,000 Mil.
Total Current Assets was $6,114 Mil.
Total Current Liabilities was $4,287 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Staples Inc's current net income (ttm) was 526. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Staples Inc's current cash flow from operations (ttm) was 1,064. ==> 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)/Average Total Assets from Jul13 to Jul14
=525.696/11615.1012
=0.0452597

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jul12 to Jul13
=-245.738/12336.1678
=-0.01992012

Staples Inc's return on assets of this year was 0.0452597. Staples Inc's return on assets of last year was -0.01992012. ==> 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 526. Staples Inc's current cash flow from operations (ttm) was 1,064. ==> 1,064 > 526 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul14)=Long-Term Debt/Total Assets
=1015.699/11278.024
=0.09006001

Gearing (Last Year: Jul13)=Long-Term Debt/Total Assets
=1000.336/11999.64
=0.08336383

Staples Inc's gearing of this year was 0.09006001. Staples Inc's gearing of last year was 0.08336383. ==> 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: Jul14)=Total Current Assets/Total Current Liabilities
=5431.874/3519.048
=1.54356349

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=6114.235/4287.406
=1.42609191

Staples Inc's current ratio of this year was 1.54356349. Staples Inc's current ratio of last year was 1.42609191. ==> 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 647. Staples Inc's number of shares in issue last year was 662.4. ==> 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
=5880.116/22859.33
=0.25723046

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6341.769/24050.415
=0.26368647

Staples Inc's gross margin of this year was 0.25723046. Staples Inc's gross margin of last year was 0.26368647. ==> 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 average total assets throughout 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)/Average Total Assets from Jul13 to Jul14
=22859.33/11615.1012
=1.96806981

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jul12 to Jul13
=24050.415/12336.1678
=1.94958559

Staples Inc's asset turnover of this year was 1.96806981. Staples Inc's asset turnover of last year was 1.94958559. ==> 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+0+1+1+0+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Staples Inc has an F-score of 7 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 1111100111
Q8 1111001100
Q9 1110110000
F-score 9886556846

Staples Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1100001111
Q2 1111111111
Q3 1000001111
Q4 1111111111
Q5 1101111000
Q6 1010000111
Q7 1111111111
Q8 1000000000
Q9 1111111111
F-score 9655557777
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