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Sonic Piotroski F-Score

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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

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

The historical rank and industry rank for Sonic's Piotroski F-Score or its related term are showing as below:


Sonic Piotroski F-Score Historical Data

The historical data trend for Sonic's Piotroski F-Score can be seen below:

* 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.

Sonic Annual Data
Trend Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 7.00 8.00 4.00 8.00

Sonic Quarterly Data
Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18
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 6.00 7.00 6.00 8.00

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 (Aug18) TTM:Last Year (Aug17) TTM:
Net Income was 11.43 + 19.607 + 21.576 + 18.592 = $71.2 Mil.
Cash Flow from Operations was 23.076 + 16.54 + 25.216 + 26.714 = $91.5 Mil.
Revenue was 105.428 + 88.102 + 118.306 + 111.754 = $423.6 Mil.
Gross Profit was 51.362 + 41.048 + 76.289 + 26.765 = $195.5 Mil.
Average Total Assets from the begining of this year (Aug17)
to the end of this year (Aug18) was
(561.744 + 552.913 + 561.536 + 545.546 + 531.134) / 5 = $550.5746 Mil.
Total Assets at the begining of this year (Aug17) was $561.7 Mil.
Long-Term Debt & Capital Lease Obligation was $714.5 Mil.
Total Current Assets was $104.4 Mil.
Total Current Liabilities was $62.1 Mil.
Net Income was 13.118 + 10.963 + 18.751 + 20.831 = $63.7 Mil.

Revenue was 129.551 + 100.158 + 123.99 + 123.568 = $477.3 Mil.
Gross Profit was 54.243 + 42.932 + 79.02 + 17.457 = $193.7 Mil.
Average Total Assets from the begining of last year (Aug16)
to the end of last year (Aug17) was
(648.661 + 593.316 + 571.664 + 563.834 + 561.744) / 5 = $587.8438 Mil.
Total Assets at the begining of last year (Aug16) was $648.7 Mil.
Long-Term Debt & Capital Lease Obligation was $644.3 Mil.
Total Current Assets was $89.2 Mil.
Total Current Liabilities was $58.6 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.

Sonic's current Net Income (TTM) was 71.2. ==> 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.

Sonic's current Cash Flow from Operations (TTM) was 91.5. ==> 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 (Aug17)
=71.205/561.744
=0.12675703

ROA (Last Year)=Net Income/Total Assets (Aug16)
=63.663/648.661
=0.09814526

Sonic's return on assets of this year was 0.12675703. Sonic's return on assets of last year was 0.09814526. ==> 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.

Sonic's current Net Income (TTM) was 71.2. Sonic's current Cash Flow from Operations (TTM) was 91.5. ==> 91.5 > 71.2 ==> 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: Aug18)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Aug17 to Aug18
=714.481/550.5746
=1.29770062

Gearing (Last Year: Aug17)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Aug16 to Aug17
=644.283/587.8438
=1.09601054

Sonic's gearing of this year was 1.29770062. Sonic's gearing of last year was 1.09601054. ==> 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: Aug18)=Total Current Assets/Total Current Liabilities
=104.429/62.079
=1.68219527

Current Ratio (Last Year: Aug17)=Total Current Assets/Total Current Liabilities
=89.184/58.616
=1.52149584

Sonic's current ratio of this year was 1.68219527. Sonic's current ratio of last year was 1.52149584. ==> 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.

Sonic's number of shares in issue this year was 36.445. Sonic's number of shares in issue last year was 41.985. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=195.464/423.59
=0.46144621

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=193.652/477.267
=0.40575192

Sonic's gross margin of this year was 0.46144621. Sonic's gross margin of last year was 0.40575192. ==> 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/Total Assets at the Beginning of This Year (Aug17)
=423.59/561.744
=0.75406235

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Aug16)
=477.267/648.661
=0.73577261

Sonic's asset turnover of this year was 0.75406235. Sonic's asset turnover of last year was 0.73577261. ==> 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+1+1+1
=8

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

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

Sonic  (NAS:SONC) 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.


Sonic Piotroski F-Score Related Terms

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Sonic Business Description

Sonic logo
Traded in Other Exchanges
N/A
Address
Sonic Corp operates and franchises drive-in restaurants throughout the United States. The restaurants typically consist of a building that houses only a kitchen to go along with 16 to 24 parking spaces that have their own payment terminals, intercom speakers, and menu boards. Carhops serve customers in their cars. Many locations also have a drive-thru lane and patio seating as alternatives. Sonic franchises roughly 90% of its restaurants, and the royalty revenue the company earns on franchise sales contributes roughly a quarter of total company revenue. Company-operated stores provide the balance of total revenue. Sonic owns the property on which hundreds of its restaurants are located. For those properties that house franchised stores, franchisees lease from the company.
Executives
Davis Steven A director 3776 SOUTH HIGH ST COLUMBUS OH 43207
Hobart Lauren R director 345 COURT STREET CORAOPOLIS PA 15275
Bartel Tony director 625 WESTPORT PARKWAY GRAPEVINE TX 76051
Taylor Kathy L director C/O FREDERIC DORWART LAWYERS 124 EAST FOURTH STREET TULSA OK 74103
San Pedro Claudia officer: President 300 JOHNNY BENCH DRIVE OKLAHOMA CITY OK 73104
Lavelle Kate S director 24089 3RD STREET FAIRHOPE AL 36532
Pena Federico F director 711 HIGH STREET DES MOINES IA 50392-0300
Nichols J Larry director DEVON ENERGY CORP 20 NORTH BROADWAY STE 1500 OKLAHOMA CITY OK 73102-8260
Southeastern Asset Management Inc/tn/ 10 percent owner 6410 POPLAR AVENUE SUITE 900 MEMPHIS TN 38119
Longleaf Partners Funds Trust 10 percent owner C/O SOUTHEASTERN ASSET MANAGEMENT 6410 POPLAR AVE, SUITE 900 MEMPHIS TN 38119
Smith Todd Whitney officer: President and CMO 300 JOHNNY BENCH DRIVE OKLAHOMA CITY OK 73104
Miller Craig Jeffrey officer: Former Officer of Subsidiary 5008 HARTRIDGE WAY GREENSBORO NC 27407
Rosenberg Robert M director
Maples Michael J director 2208 WINDSOR ROAD AUSTIN TX 78703
Benham Douglas N director
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