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Trio-Tech International (AMEX:TRT)
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

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

TRT' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of Trio-Tech International was 8. The lowest was 1. And the median was 5.


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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was -0.365 + -0.017 + 0.046 + -0.543 = $-0.88 Mil.
Cash Flow from Operations was 0.988 + 1.213 + -0.612 + 0.458 = $2.05 Mil.
Revenue was 9.339 + 9.497 + 8.143 + 6.529 = $33.51 Mil.
Gross Profit was 1.987 + 2.091 + 2.076 + 1.164 = $7.32 Mil.
Total Assets at the begining of this year (Dec12) was $34.03 Mil.
Total Assets was $34.70 Mil.
Long-Term Debt was $2.44 Mil.
Total Current Assets was $14.81 Mil.
Total Current Liabilities was $11.49 Mil.
Net Income was -0.506 + -0.017 + -0.579 + -0.518 = $-1.62 Mil.

Revenue was 7.221 + 9.575 + 8.16 + 7.522 = $32.48 Mil.
Gross Profit was 1.548 + 1.839 + 2.059 + 0.924 = $6.37 Mil.
Total Assets at the begining of last year (Dec11) was $36.65 Mil.
Total Assets was $34.03 Mil.
Long-Term Debt was $3.31 Mil.
Total Current Assets was $13.87 Mil.
Total Current Liabilities was $9.22 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.

Trio-Tech International's current net income was -0.88. ==> Negative ==> Score 0.

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.

Trio-Tech International's current cash flow from operations was 2.05. ==> 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 (Dec12)
=-0.879/34.033
=-0.02582787

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-1.62/36.649
=-0.04420312

Trio-Tech International's return on assets of this year was -0.02582787. Trio-Tech International's return on assets of last year was -0.04420312. ==> 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.

Trio-Tech International's current net income was -0.88. Trio-Tech International's current cash flow from operations was 2.05. ==> 2.05 > -0.88 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=2.443/34.696
=0.07041157

Gearing (Last Year)=Long-Term Debt/Total Assets
=3.308/34.033
=0.09719978

Trio-Tech International's gearing of this year was 0.07041157. Trio-Tech International's gearing of last year was 0.09719978. ==> This year is lower. ==> 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
=14.808/11.486
=1.28922166

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=13.872/9.224
=1.50390286

Trio-Tech International's current ratio of this year was 1.28922166. Trio-Tech International's current ratio of last year was 1.50390286. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Trio-Tech International's number of shares in issue this year was 3.5. Trio-Tech International's number of shares in issue last year was 3.3. ==> There is more number of shares in issue this year. ==> Score 0.

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
=7.318/33.508
=0.21839561

Gross Margin (Last Year)=Gross Profit/Revenue
=6.37/32.478
=0.19613277

Trio-Tech International's gross margin of this year was 0.21839561. Trio-Tech International's gross margin of last year was 0.19613277. ==> 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 (Dec12)
=33.508/34.033
=0.9845738

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=32.478/36.649
=0.88619062

Trio-Tech International's asset turnover of this year was 0.9845738. Trio-Tech International's asset turnover of last year was 0.88619062. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Trio-Tech International 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.

Trio-Tech International Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
Q1 1111000000
Q2 1101110101
Q3 1010001001
Q4 1101110101
Q5 1111010001
Q6 0011110100
Q7 0000100000
Q8 1010010101
Q9 1111001010
F-score 7566452415

Trio-Tech International Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 0000000000
Q2 1000011111
Q3 0000011111
Q4 1110011111
Q5 0000011111
Q6 1000000000
Q7 1100000000
Q8 1000011111
Q9 0001111001
F-score 5211166556
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