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Conn's Inc (NAS:CONN)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Conn's Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

CONN' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 4

2
7

During the past 13 years, the highest Piotroski F-Score of Conn's Inc was 7. The lowest was 2. 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 local exchange's currency.

This Year (Apr17) TTM:Last Year (Apr16) TTM:
Net Income was -11.924 + -3.815 + -0.074 + -2.58 = $-18 Mil.
Cash Flow from Operations was 23.244 + 51.113 + 22.119 + 90.764 = $187 Mil.
Revenue was 398.157 + 376.773 + 432.805 + 355.826 = $1,564 Mil.
Gross Profit was 189.288 + 184.399 + 215.432 + 183.876 = $773 Mil.
Average Total Assets from the begining of this year (Apr16)
to the end of this year (Apr17) was
(1996.825 + 1997.178 + 2080.634 + 1941.134 + 2010.606) / 5 = $2005.2754 Mil.
Total Assets at the begining of this year (Apr16) was $1,997 Mil.
Long-Term Debt was $1,206 Mil.
Total Current Assets was $1,178 Mil.
Total Current Liabilities was $175 Mil.
Net Income was 16.538 + -2.421 + 1.061 + -9.749 = $5 Mil.

Revenue was 396.05 + 395.233 + 456.819 + 389.113 = $1,637 Mil.
Gross Profit was 193.589 + 192.332 + 216.188 + 184.647 = $787 Mil.
Average Total Assets from the begining of last year (Apr15)
to the end of last year (Apr16) was
(1612.672 + 1752.072 + 2088.843 + 2025.3 + 1996.825) / 5 = $1895.1424 Mil.
Total Assets at the begining of last year (Apr15) was $1,613 Mil.
Long-Term Debt was $1,203 Mil.
Total Current Assets was $1,133 Mil.
Total Current Liabilities was $162 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.

Conn's Inc's current net income (TTM) was -18. ==> Negative ==> Score 0.

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.

Conn's Inc's current cash flow from operations (TTM) was 187. ==> 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 (Apr16)
=-18.393/1996.825
=-0.00921112

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Apr15)
=5.429/1612.672
=0.00336646

Conn's Inc's return on assets of this year was -0.00921112. Conn's Inc's return on assets of last year was 0.00336646. ==> Last year is higher ==> Score 0.

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.

Conn's Inc's current net income (TTM) was -18. Conn's Inc's current cash flow from operations (TTM) was 187. ==> 187 > -18 ==> 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: Apr17)=Long-Term Debt/Average Total Assets from Apr16 to Apr17
=1206.452/2005.2754
=0.60163906

Gearing (Last Year: Apr16)=Long-Term Debt/Average Total Assets from Apr15 to Apr16
=1203.361/1895.1424
=0.63497128

Conn's Inc's gearing of this year was 0.60163906. Conn's Inc's gearing of last year was 0.63497128. ==> This year is lower or equal to last year. ==> Score 1.

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: Apr17)=Total Current Assets/Total Current Liabilities
=1178.058/174.627
=6.74613891

Current Ratio (Last Year: Apr16)=Total Current Assets/Total Current Liabilities
=1133.487/162.481
=6.97612028

Conn's Inc's current ratio of this year was 6.74613891. Conn's Inc's current ratio of last year was 6.97612028. ==> Last year's current ratio is higher ==> Score 0.

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.

Conn's Inc's number of shares in issue this year was 31. Conn's Inc's number of shares in issue last year was 30.7. ==> 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
=772.995/1563.561
=0.4943811

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=786.756/1637.215
=0.48054532

Conn's Inc's gross margin of this year was 0.4943811. Conn's Inc's gross margin of last year was 0.48054532. ==> 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 (Apr16)
=1563.561/1996.825
=0.78302355

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Apr15)
=1637.215/1612.672
=1.01521884

Conn's Inc's asset turnover of this year was 0.78302355. Conn's Inc's asset turnover of last year was 1.01521884. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+1+0+0+1+0
=4

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

Conn's Inc has an F-score of 4 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 local exchange's currency.

Conn's Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Question 1 1110011110
Question 2 0011100001
Question 3 0100011000
Question 4 0011100001
Question 5 1001110001
Question 6 1001001110
Question 7 1100000111
Question 8 0111111111
Question 9 0100111000
F-score 4545555445

Conn's Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
Question 1 1111110000
Question 2 0000000111
Question 3 0000000000
Question 4 0000000111
Question 5 0000000111
Question 6 1111111000
Question 7 1101111110
Question 8 1111110011
Question 9 0000000000
F-score 4434442454
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