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Rite Aid Corp  (NYSE:RAD) Piotroski F-Score: 6 (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

Rite Aid Corp has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NYSE:RAD' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of Rite Aid Corp was 8. The lowest was 1. And the median was 5.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Rite Aid Corp Annual Data

Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.00 6.00 6.00 4.00 5.00

Rite Aid Corp Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 5.00 5.00 5.00 3.00 6.00

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.

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 (Aug17) TTM:Last Year (Aug16) TTM:
Net Income was 15.01 + -21.142 + -75.349 + 170.716 = $89 Mil.
Cash Flow from Operations was 146.414 + 60.41 + 92.734 + 205.097 = $505 Mil.
Revenue was 8089.726 + 8541.361 + 7781.453 + 7678.903 = $32,091 Mil.
Gross Profit was 1894.86 + 2068.162 + 1759.034 + 1787.003 = $7,509 Mil.
Average Total Assets from the begining of this year (Aug16)
to the end of this year (Aug17) was
(11610.969 + 11658.926 + 11593.752 + 11460.138 + 11498.308) / 5 = $11564.4186 Mil.
Total Assets at the begining of this year (Aug16) was $11,611 Mil.
Long-Term Debt & Capital Lease Obligation was $7,120 Mil.
Total Current Assets was $5,181 Mil.
Total Current Liabilities was $2,981 Mil.
Net Income was 59.543 + 65.617 + -4.588 + 14.773 = $135 Mil.

Revenue was 8154.184 + 8270.136 + 8184.181 + 8029.806 = $32,638 Mil.
Gross Profit was 2002.879 + 2041.556 + 1894.3 + 1916.743 = $7,855 Mil.
Average Net Income from the begining of last year (Aug15)
to the end of last year (Aug16) was
(11979.231 + 11718.08 + 11277.01 + 11254.947 + 11610.969) / 5 = $11568.0474 Mil.
Total Assets at the begining of last year (Aug15) was $11,979 Mil.
Long-Term Debt & Capital Lease Obligation was $7,220 Mil.
Total Current Assets was $4,939 Mil.
Total Current Liabilities was $3,052 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.

Rite Aid Corp's current Net Income (TTM) was 89. ==> 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.

Rite Aid Corp's current Cash Flow from Operations (TTM) was 505. ==> 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(Aug16)
=89.235/11610.969
=0.00768541

ROA (Last Year)=Net Income/Total Assets(Aug15)
=135.345/11979.231
=0.0112983

Rite Aid Corp's return on assets of this year was 0.00768541. Rite Aid Corp's return on assets of last year was 0.0112983. ==> 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.

Rite Aid Corp's current Net Income (TTM) was 89. Rite Aid Corp's current Cash Flow from Operations (TTM) was 505. ==> 505 > 89 ==> 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: Aug17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Aug16 to Aug17
=7120.439/11564.4186
=0.61571958

Gearing (Last Year: Aug16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Aug15 to Aug16
=7220.297/11568.0474
=0.62415866

Rite Aid Corp's gearing of this year was 0.61571958. Rite Aid Corp's gearing of last year was 0.62415866. ==> 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: Aug17)=Total Current Assets/Total Current Liabilities
=5181.369/2981.211
=1.73800815

Current Ratio (Last Year: Aug16)=Total Current Assets/Total Current Liabilities
=4938.516/3051.946
=1.61815314

Rite Aid Corp's current ratio of this year was 1.73800815. Rite Aid Corp's current ratio of last year was 1.61815314. ==> 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.

Rite Aid Corp's number of shares in issue this year was 1067.2. Rite Aid Corp's number of shares in issue last year was 1061.4. ==> 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
=7509.059/32091.443
=0.23398945

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=7855.478/32638.307
=0.24068277

Rite Aid Corp's gross margin of this year was 0.23398945. Rite Aid Corp's gross margin of last year was 0.24068277. ==> 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 (Aug16)
=32091.443/11610.969
=2.76389016

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Aug15)
=32638.307/11979.231
=2.72457447

Rite Aid Corp's asset turnover of this year was 2.76389016. Rite Aid Corp's asset turnover of last year was 2.72457447. ==> 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+0+1+1+1+0+0+1
=6

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

Rite Aid Corp has an F-score of 6 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.


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