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

TAL Education Group has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

XRS' s 10-Year Piotroski F-Score Range
Min: 5   Max: 7
Current: 7

5
7

During the past 6 years, the highest Piotroski F-Score of TAL Education Group was 7. The lowest was 5. 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 (Nov12) TTM:
Net Income was 16.71 + 12.509 + 23.329 + 6.848 = $59.4 Mil.
Cash Flow from Operations was 101.558 + 0 + 0 + 65.41 = $167.0 Mil.
Revenue was 86.999 + 73.53 + 91.968 + 59.648 = $312.1 Mil.
Gross Profit was 46.231 + 37.668 + 48.974 + 28.259 = $161.1 Mil.
Total Assets at the begining of this year (Nov12) was $351.8 Mil.
Total Assets was $427.6 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $300.4 Mil.
Total Current Liabilities was $166.8 Mil.
Net Income was 5.599 + 16.042 + 4.951 + 7.582 = $34.2 Mil.

Revenue was 48.905 + 68.064 + 49.315 + 52.216 = $218.5 Mil.
Gross Profit was 22.167 + 36.219 + 23.538 + 23.705 = $105.6 Mil.
Total Assets at the begining of last year (Nov11) was $275.2 Mil.
Total Assets was $351.8 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $265.6 Mil.
Total Current Liabilities was $169.0 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.

TAL Education Group's current net income was 59.4. ==> Positive ==> Score 1.

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.

TAL Education Group's current cash flow from operations was 167.0. ==> 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 (Nov12)
=59.396/351.823
=0.16882353

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Nov11)
=34.174/275.152
=0.12420044

TAL Education Group's return on assets of this year was 0.16882353. TAL Education Group's return on assets of last year was 0.12420044. ==> 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.

TAL Education Group's current net income was 59.4. TAL Education Group's current cash flow from operations was 167.0. ==> 167.0 > 59.4 ==> 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)=Long-Term Debt/Total Assets
=0/427.599
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/351.823
=0

TAL Education Group's gearing of this year was 0. TAL Education Group's gearing of last year was 0. ==> 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)=Total Current Assets/Total Current Liabilities
=300.377/166.756
=1.80129651

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=265.573/169.042
=1.57104743

TAL Education Group's current ratio of this year was 1.80129651. TAL Education Group's current ratio of last year was 1.57104743. ==> 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.

TAL Education Group's number of shares in issue this year was 78.7. TAL Education Group's number of shares in issue last year was 78.1. ==> 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)=Gross Profit/Revenue
=161.132/312.145
=0.51620881

Gross Margin (Last Year)=Gross Profit/Revenue
=105.629/218.5
=0.48342792

TAL Education Group's gross margin of this year was 0.51620881. TAL Education Group's gross margin of last year was 0.48342792. ==> 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 (Nov12)
=312.145/351.823
=0.8872217

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Nov11)
=218.5/275.152
=0.79410653

TAL Education Group's asset turnover of this year was 0.8872217. TAL Education Group's asset turnover of last year was 0.79410653. ==> 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+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

TAL Education Group has an F-score of 8. 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

Feb09Feb10Feb11Feb12Feb13Feb14
Q1 11
Q2 11
Q3 11
Q4 11
Q5 11
Q6 00
Q7 00
Q8 11
Q9 01
F-score 67

TAL Education Group Quarterly Data

Aug11Nov11Feb12May12Aug12Nov12Feb13Aug13Nov13Feb14
Q1 111111
Q2 111111
Q3 001111
Q4 111111
Q5 111111
Q6 000001
Q7 000000
Q8 011111
Q9 000111
F-score 0000345667
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