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Tesco PLC (OTCPK:TSCDY)
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

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

TSCDY' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 7

4
8

During the past 13 years, the highest Piotroski F-Score of Tesco PLC 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 (Feb14) TTM:Last Year (Feb13) TTM:
Net Income was $1,618 Mil.
Cash Flow from Operations was $5,291 Mil.
Revenue was $105,576 Mil.
Gross Profit was $6,661 Mil.
Average Total Assets from the begining of this year (Feb13)
to the end of this year (Feb14) was (75609.3514329 + 83328.9036545) / 2 = $79,469 Mil.
Total Assets as of Feb13 was $75,609 Mil.
Long-Term Debt was $15,453 Mil.
Total Current Assets was $25,867 Mil.
Total Current Liabilities was $35,547 Mil.
Net Income was $42 Mil.

Revenue was $95,635 Mil.
Gross Profit was $6,265 Mil.
Average Total Assets from the begining of last year (Feb12)
to the end of last year (Feb13) was (80349.6835443 + 75609.3514329) / 2 = $77,980 Mil.
Total Assets as of Feb12 was $80,350 Mil.
Long-Term Debt was $15,186 Mil.
Total Current Assets was $19,753 Mil.
Total Current Liabilities was $28,635 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.

Tesco PLC's current net income (ttm) was 1,618. ==> 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.

Tesco PLC's current cash flow from operations (ttm) was 5,291. ==> 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 (Feb13)
=1617.94019934/75609.3514329
=0.02139868

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Feb12)
=42.2322775264/80349.6835443
=0.00052561

Tesco PLC's return on assets of this year was 0.02139868. Tesco PLC's return on assets of last year was 0.00052561. ==> 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.

Tesco PLC's current net income (ttm) was 1,618. Tesco PLC's current cash flow from operations (ttm) was 5,291. ==> 5,291 > 1,618 ==> 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: Feb14)=Long-Term Debt/Average Total Assets from Feb13 to Feb14
=15453.4883721/79469.1275437
=0.19445902

Gearing (Last Year: Feb13)=Long-Term Debt/Average Total Assets from Feb12 to Feb13
=15185.520362/77979.5174886
=0.1947373

Tesco PLC's gearing of this year was 0.19445902. Tesco PLC's gearing of last year was 0.1947373. ==> This year is lower or equal to last year. ==> 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: Feb14)=Total Current Assets/Total Current Liabilities
=25867.1096346/35546.5116279
=0.72769756

Current Ratio (Last Year: Feb13)=Total Current Assets/Total Current Liabilities
=19752.6395173/28634.9924585
=0.68980774

Tesco PLC's current ratio of this year was 0.72769756. Tesco PLC's current ratio of last year was 0.68980774. ==> 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.

Tesco PLC's number of shares in issue this year was 2692.7. Tesco PLC's number of shares in issue last year was 2679. ==> There is larger 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: TTM)=Gross Profit/Revenue
=6661.12956811/105576.41196
=0.06309297

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6265.46003017/95634.9924585
=0.0655143

Tesco PLC's gross margin of this year was 0.06309297. Tesco PLC's gross margin of last year was 0.0655143. ==> 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 (Feb13)
=105576.41196/75609.3514329
=1.39634066

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Feb12)
=95634.9924585/80349.6835443
=1.19023484

Tesco PLC's asset turnover of this year was 1.39634066. Tesco PLC's asset turnover of last year was 1.19023484. ==> 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+1+1+0+0+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Tesco PLC 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.

Tesco PLC Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Q1 1111111111
Q2 1111111111
Q3 0010011001
Q4 1111111111
Q5 1100011111
Q6 1011100011
Q7 0001100110
Q8 0001111000
Q9 0010011001
F-score 5466677567
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