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Tesco PLC  (OTCPK:TSCDY) 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

Tesco PLC has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

OTCPK:TSCDY' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 4

2
8

During the past 13 years, the highest Piotroski F-Score of Tesco PLC was 8. The lowest was 2. And the median was 6.


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.

Tesco PLC 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 6.00 7.00 2.00 7.00 4.00

Tesco PLC Semi-Annual Data

Feb08 Aug08 Feb09 Aug09 Feb10 Aug10 Feb11 Aug11 Feb12 Aug12 Feb13 Aug13 Feb14 Aug14 Feb15 Aug15 Feb16 Aug16 Feb17 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 0.00 7.00 0.00 4.00 0.00

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 (Feb17) TTM:Last Year (Feb16) TTM:
Net Income was $-50 Mil.
Cash Flow from Operations was $2,486 Mil.
Revenue was $69,896 Mil.
Gross Profit was $3,628 Mil.
Average Total Assets from the begining of this year (Feb16)
to the end of this year (Feb17) was (62720 + 57316.25) / 2 = $60018.125 Mil.
Total Assets at the begining of this year (Feb16) was $62,720 Mil.
Long-Term Debt & Capital Lease Obligation was $11,791 Mil.
Total Current Assets was $19,271 Mil.
Total Current Liabilities was $24,256 Mil.
Net Income was $197 Mil.

Revenue was $77,047 Mil.
Gross Profit was $4,063 Mil.
Average Net Income from the begining of last year (Feb15)
to the end of last year (Feb16) was (67812.8834356 + 62720) / 2 = $65266.4417178 Mil.
Total Assets at the begining of last year (Feb15) was $67,813 Mil.
Long-Term Debt & Capital Lease Obligation was $15,301 Mil.
Total Current Assets was $20,977 Mil.
Total Current Liabilities was $25,523 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.

Tesco PLC's current Net Income (TTM) was -50. ==> 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.

Tesco PLC's current Cash Flow from Operations (TTM) was 2,486. ==> 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(Feb16)
=-50/62720
=-0.00079719

ROA (Last Year)=Net Income/Total Assets(Feb15)
=197.142857143/67812.8834356
=0.00290716

Tesco PLC's return on assets of this year was -0.00079719. Tesco PLC's return on assets of last year was 0.00290716. ==> 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.

Tesco PLC's current Net Income (TTM) was -50. Tesco PLC's current Cash Flow from Operations (TTM) was 2,486. ==> 2,486 > -50 ==> 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: Feb17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Feb16 to Feb17
=11791.25/60018.125
=0.19646149

Gearing (Last Year: Feb16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Feb15 to Feb16
=15301.4285714/65266.4417178
=0.23444558

Tesco PLC's gearing of this year was 0.19646149. Tesco PLC's gearing of last year was 0.23444558. ==> 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: Feb17)=Total Current Assets/Total Current Liabilities
=19271.25/24256.25
=0.79448596

Current Ratio (Last Year: Feb16)=Total Current Assets/Total Current Liabilities
=20977.1428571/25522.8571429
=0.82189634

Tesco PLC's current ratio of this year was 0.79448596. Tesco PLC's current ratio of last year was 0.82189634. ==> 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.

Tesco PLC's number of shares in issue this year was 2722.7. Tesco PLC's number of shares in issue last year was 2717.3. ==> 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
=3627.5/69896.25
=0.05189835

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4062.85714286/77047.1428571
=0.05273209

Tesco PLC's gross margin of this year was 0.05189835. Tesco PLC's gross margin of last year was 0.05273209. ==> 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 (Feb16)
=69896.25/62720
=1.11441725

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Feb15)
=77047.1428571/67812.8834356
=1.13617264

Tesco PLC's asset turnover of this year was 1.11441725. Tesco PLC's asset turnover of last year was 1.13617264. ==> 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+0+0
=3

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

Tesco PLC has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

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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