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Darden Restaurants Piotroski F-Score

: 4 (As of Today)
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The zones of discrimination were as such:

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

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

NYSE:DRI' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Med: 7   Max: 9
Current: 4

3
9

During the past 13 years, the highest Piotroski F-Score of Darden Restaurants was 9. The lowest was 3. And the median was 7.


Darden Restaurants Piotroski F-Score Historical Data

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Darden Restaurants Annual Data
May11 May12 May13 May14 May15 May16 May17 May18 May19 May20
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 6.00 6.00 9.00 4.00

Darden Restaurants Quarterly Data
May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.00 4.00 4.00 4.00 4.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Darden Restaurants Piotroski F-Score Distribution

* The bar in red indicates where Darden Restaurants's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Feb21) TTM:Last Year (Feb20) TTM:
Net Income was -480 + 36.1 + 96 + 128.7 = $-219 Mil.
Cash Flow from Operations was -208.6 + 208.9 + 219.7 + 318.9 = $539 Mil.
Revenue was 1270.1 + 1527.4 + 1656.5 + 1733 = $6,187 Mil.
Gross Profit was 10.5 + 301.3 + 315.4 + 337.4 = $965 Mil.
Average Total Assets from the begining of this year (Feb20)
to the end of this year (Feb21) was
(9973.3 + 9946.1 + 9789.5 + 9927.6 + 10096.1) / 5 = $9946.52 Mil.
Total Assets at the begining of this year (Feb20) was $9,973 Mil.
Long-Term Debt & Capital Lease Obligation was $5,086 Mil.
Total Current Assets was $1,300 Mil.
Total Current Liabilities was $1,647 Mil.
Net Income was 208 + 170.6 + 24.7 + 232.3 = $636 Mil.

Revenue was 2229.1 + 2133.9 + 2056.4 + 2346.5 = $8,766 Mil.
Gross Profit was 503.8 + 454.4 + 405.5 + 538 = $1,902 Mil.
Average Total Assets from the begining of last year (Feb19)
to the end of last year (Feb20) was
(5697.8 + 5892.8 + 9719.5 + 9742.7 + 9973.3) / 5 = $8205.22 Mil.
Total Assets at the begining of last year (Feb19) was $5,698 Mil.
Long-Term Debt & Capital Lease Obligation was $5,246 Mil.
Total Current Assets was $686 Mil.
Total Current Liabilities was $1,683 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

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.

Darden Restaurants's current Net Income (TTM) was -219. ==> 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.

Darden Restaurants's current Cash Flow from Operations (TTM) was 539. ==> 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/Total Assets (Feb20)
=-219.2/9973.3
=-0.02197868

ROA (Last Year)=Net Income/Total Assets (Feb19)
=635.6/5697.8
=0.11155183

Darden Restaurants's return on assets of this year was -0.02197868. Darden Restaurants's return on assets of last year was 0.11155183. ==> 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.

Darden Restaurants's current Net Income (TTM) was -219. Darden Restaurants's current Cash Flow from Operations (TTM) was 539. ==> 539 > -219 ==> 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: Feb21)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Feb20 to Feb21
=5086/9946.52
=0.51133462

Gearing (Last Year: Feb20)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Feb19 to Feb20
=5245.9/8205.22
=0.63933691

Darden Restaurants's gearing of this year was 0.51133462. Darden Restaurants's gearing of last year was 0.63933691. ==> 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: Feb21)=Total Current Assets/Total Current Liabilities
=1300.4/1646.5
=0.78979654

Current Ratio (Last Year: Feb20)=Total Current Assets/Total Current Liabilities
=686/1683.1
=0.40758125

Darden Restaurants's current ratio of this year was 0.78979654. Darden Restaurants's current ratio of last year was 0.40758125. ==> 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.

Darden Restaurants's number of shares in issue this year was 132. Darden Restaurants's number of shares in issue last year was 122.8. ==> 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
=964.6/6187
=0.15590755

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1901.7/8765.9
=0.21694293

Darden Restaurants's gross margin of this year was 0.15590755. Darden Restaurants's gross margin of last year was 0.21694293. ==> Last year's gross margin is higher ==> Score 0.

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/Total Assets at the Beginning of This Year (Feb20)
=6187/9973.3
=0.62035635

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Feb19)
=8765.9/5697.8
=1.53847099

Darden Restaurants's asset turnover of this year was 0.62035635. Darden Restaurants's asset turnover of last year was 1.53847099. ==> 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+1+0+0+0
=4

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

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

Darden Restaurants  (NYSE:DRI) Piotroski F-Score 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.


Darden Restaurants Piotroski F-Score Related Terms


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