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TAL Education Group (NYSE:XRS)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

TAL Education Group has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

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

4
8

During the past 7 years, the highest Piotroski F-Score of TAL Education Group was 8. 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 (Nov14) TTM:Last Year (Nov13) TTM:
Net Income was 16.71 + 13.35 + 29.118 + 10.959 = $70.1 Mil.
Cash Flow from Operations was 101.558 + 0 + 0 + 0 = $101.6 Mil.
Revenue was 86.999 + 89.026 + 122.371 + 99.368 = $397.8 Mil.
Gross Profit was 46.231 + 47.332 + 69.133 + 50.412 = $213.1 Mil.
Average Total Assets from the begining of this year (Nov13)
to the end of this year (Nov14) was
(454.081 + 427.599 + 747.747 + 739.959 + 829.39) / 5 = $639.7552 Mil.
Total Assets at the begining of this year (Nov13) was $454.1 Mil.
Long-Term Debt was $225.6 Mil.
Total Current Assets was $610.4 Mil.
Total Current Liabilities was $299.4 Mil.
Net Income was 6.848 + 8.058 + 23.329 + 12.509 = $50.7 Mil.

Revenue was 59.648 + 61.398 + 91.968 + 73.53 = $286.5 Mil.
Gross Profit was 28.259 + 29.479 + 48.974 + 37.668 = $144.4 Mil.
Average Total Assets from the begining of last year (Nov12)
to the end of last year (Nov13) was
(351.823 + 316.042 + 0 + 404.632 + 454.081) / 5 = $305.3156 Mil.
Total Assets at the begining of last year (Nov12) was $351.8 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $359.3 Mil.
Total Current Liabilities was $208.7 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.

TAL Education Group's current net income (TTM) was 70.1. ==> 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.

TAL Education Group's current cash flow from operations (TTM) was 101.6. ==> 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 (Nov13)
=70.137/454.081
=0.15445923

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Nov12)
=50.744/351.823
=0.14423162

TAL Education Group's return on assets of this year was 0.15445923. TAL Education Group's return on assets of last year was 0.14423162. ==> This year is higher. ==> Score 1.

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.

TAL Education Group's current net income (TTM) was 70.1. TAL Education Group's current cash flow from operations (TTM) was 101.6. ==> 101.6 > 70.1 ==> 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: Nov14)=Long-Term Debt/Average Total Assets from Nov13 to Nov14
=225.627/639.7552
=0.35267709

Gearing (Last Year: Nov13)=Long-Term Debt/Average Total Assets from Nov12 to Nov13
=0/305.3156
=0

TAL Education Group's gearing of this year was 0.35267709. TAL Education Group's gearing of last year was 0. ==> 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: Nov14)=Total Current Assets/Total Current Liabilities
=610.404/299.434
=2.03852602

Current Ratio (Last Year: Nov13)=Total Current Assets/Total Current Liabilities
=359.336/208.651
=1.72218681

TAL Education Group's current ratio of this year was 2.03852602. TAL Education Group's current ratio of last year was 1.72218681. ==> 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.

TAL Education Group's number of shares in issue this year was 82.4. TAL Education Group's number of shares in issue last year was 80.7. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=213.108/397.764
=0.53576493

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=144.38/286.544
=0.50386677

TAL Education Group's gross margin of this year was 0.53576493. TAL Education Group's gross margin of last year was 0.50386677. ==> This year's gross margin is higher. ==> Score 1.

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 (Nov13)
=397.764/454.081
=0.87597587

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Nov12)
=286.544/351.823
=0.814455

TAL Education Group's asset turnover of this year was 0.87597587. TAL Education Group's asset turnover of last year was 0.814455. ==> 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+1+1+0+1+0+1+1
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

TAL Education Group has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


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.

TAL Education Group Annual Data

Feb09Feb10Feb11Feb12Feb13Feb14Feb15
Question 1 111
Question 2 110
Question 3 110
Question 4 110
Question 5 110
Question 6 001
Question 7 000
Question 8 111
Question 9 011
F-score 674

TAL Education Group Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
Question 1 11111111
Question 2 11111110
Question 3 01111110
Question 4 11111110
Question 5 11111100
Question 6 00010111
Question 7 00000000
Question 8 11111111
Question 9 00011111
F-score 5606878870
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