COLM 77.71 (-1.38%)
US1985161066Manufacturing - Apparel & AccessoriesApparel Manufacturing

Last update on 2024-06-07

Columbia Sportswear (COLM) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Columbia Sportswear (COLM) Piotroski F-Score for 2023. Analyzes financial health using 9 criteria. Score: 7/9. Solid profitability, liquidity, efficiency.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 7

We're running Columbia Sportswear (COLM) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Columbia Sportswear (COLM) has been evaluated based on the Piotroski 9-criteria scoring system, earning a solid score of 7 out of 9. The company's financial performance looks promising with positive trends in various key areas: 1. Profitability: COLM shows a consistent improvement in net income and a significant increase in Cash Flow from Operations. 2. Liquidity: The current ratio has improved and remains strong, suggesting enhanced short-term financial health. 3. Operating Efficiency: Positive trends in gross margin and asset turnover point towards better operational management. However, there are areas of concern. The Return on Assets (ROA) has decreased, and leverage has slightly increased, indicating some inefficiency and growing financial risk.

Insights for Value Investors Seeking Stable Income

Columbia Sportswear (COLM) demonstrates strong financial health and efficiency, with a promising Piotroski score of 7. With positive trends in profitability, liquidity, and operational metrics, the company appears to be a well-managed and potentially valuable investment. Nevertheless, the declining ROA and rising leverage are issues that need monitoring. Overall, it is worth considering COLM for further research and investment. Investors should keep an eye on the company's ability to manage assets more effectively and maintain low debt levels.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Columbia Sportswear (COLM)

Company has a positive net income?

Net income for a given year is compared to assess if it’s positive and growing, impacting the company's overall profitability.

Historical Net Income of Columbia Sportswear (COLM)

In 2023, Columbia Sportswear reported a net income of $251.4 million. The net income is positive, which earns the company a point in this criterion. Over the last 20 years, contributing to the trend's analysis, we observe an impressive improvement from $120.1 million in 2003 to $251.4 million in 2023, notwithstanding some fluctuations, showcasing overall robust profitability. This positive trend signifies financial health and effective management, which is advantageous for shareholders.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) measures the cash generated by a company's regular business operations. A positive CFO indicates that the company is bringing in more cash than it is spending, which is essenti

Historical Operating Cash Flow of Columbia Sportswear (COLM)

In 2023, Columbia Sportswear (COLM) reported a Cash Flow from Operations (CFO) of $636,297,000. This is a significant increase compared to previous years and is considerably positive, adding 1 point in the Piotroski Analysis score. Looking at the historical data, we see that in 2022, COLM had negative CFO (-$25,241,000). This substantial positive turnaround in 2023 signifies strong operational health and effective cash management.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures the efficiency with which a company utilizes its assets to generate profits. A higher ROA indicates better management effectiveness and operational productivity.

Historical change in Return on Assets (ROA) of Columbia Sportswear (COLM)

Upon examining Columbia Sportswear (COLM), in 2023, the ROA is observed at 0.0839, a decline from the 2022 ROA of 0.1018. This negative trend suggests a slight drop in the company's asset profitability, resulting in a score of 0 for this Piotroski criterion. To further contextualize, the last 20 years of data shows fluctuating ROA levels, highlighting irregular efficiency. Comparatively, the industry median ROA trends significantly higher—around 0.5464 in 2023—indicating that COLM's asset use is comparatively less productive than its industry peers.

Operating Cashflow are higher than Netincome?

The Operating Cash Flow criterion assesses whether a company's operational cash generation exceeds its net income, indicating strong financial health.

Historical accruals of Columbia Sportswear (COLM)

For Columbia Sportswear (COLM) in 2023, the operating cash flow is $636,297,000, significantly higher than the net income of $251,400,000. This trend is favorable, suggesting that the company generates ample cash from its core operations, outweighing net profits. Such disparity showcases efficient cash management, reducing risks of liquidity constraints. The historical data conveys fluctuating yet generally positive cash flows, peaking notably in 2023, underscoring improved operational efficiency. This positive cash flow trend earns Columbia Sportswear 1 point in the Piotroski Analysis.

Liquidity of Columbia Sportswear (COLM)

Leverage is declining?

Change in Leverage evaluates whether the company's debt to equity ratio has decreased. Lower leverage indicates less financial risk.

Historical leverage of Columbia Sportswear (COLM)

'Leverage' in financial metrics typically refers to the degree to which a company is utilizing borrowed money. Columbia Sportswear's leverage ratio increased from 0.1018 in 2022 to 0.1146 in 2023, indicating an increase in financial leverage. This is not a favorable trend as higher leverage suggests higher financial risk, including potential issues with cash flow and increased interest obligations. Over the past 20 years, leverage ratios have generally stayed low, indicating conservative financial management, but the recent uptick might hint at increasing dependence on debt.

Current Ratio is growing?

Current Ratio is a liquidity metric that measures a company's ability to pay short-term obligations with short-term assets. For Columbia Sportswear (COLM), an increasing current ratio implies stronger liquidity.

Historical Current Ratio of Columbia Sportswear (COLM)

The Current Ratio for Columbia Sportswear increased from 2.8928 in 2022 to 3.3768 in 2023, signalling a positive trend in liquidity. This marks an increase of 16.7%. Given the data, the trend has been upward, specifically from a low of 2.8928 in 2022 to 3.3768 in 2023. This implies improved financial health concerning short-term liabilities and warrants a score of 1 point for this criterion. Comparatively, the industry's median current ratio for 2023 stands at 1.64, positioning Columbia Sportswear substantially ahead in terms of liquidity.

Number of shares not diluted?

Analyzing changes in shares outstanding is critical for investors as it can affect the company's earnings per share (EPS) and signal management's confidence in its stock value.

Historical outstanding shares of Columbia Sportswear (COLM)

Columbia Sportswear (COLM) shows a decrease in outstanding shares from 62,754,000 in 2022 to 61,232,000 in 2023. This trend is favorable for investors, garnering 1 point in the Piotroski analysis. Historically, the number of shares has been gradually decreasing since 2003, reflecting consistent share repurchase programs which often indicate management's belief in the company's intrinsic value. The 2023 figure continues this consistent trend, suggesting sustained confidence in the company's prospects.

Operating of Columbia Sportswear (COLM)

Cross Margin is growing?

Change in Gross Margin compares the percentage of revenue remaining after costs of goods sold relative to previous periods.

Historical gross margin of Columbia Sportswear (COLM)

For Columbia Sportswear (COLM), the gross margin has increased from 0.4939 in 2022 to 0.4961 in 2023. This is a modest improvement, suggesting better cost management or pricing power. Therefore, we add 1 point for the gross margin criterion. Additionally, when contextualizing this within the last 20 years, Columbia Sportswear’s gross margin has shown an overall positive trend, though fluctuations exist. It is worth noting Columbia has consistently outperformed the industry median, suggesting competitive strength in managing their production and sourcing costs.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales. An increasing ratio shows that the company is utilizing its assets more effectively, which usually signals better operational performance.

Historical asset turnover ratio of Columbia Sportswear (COLM)

In the case of Columbia Sportswear (COLM), the Asset Turnover in 2023 is 1.1642, which is an increase from the 2022 ratio of 1.1323. This translates into better utilization of the company's assets to generate revenue, thus receiving 1 point for this criterion. Over the past 20 years, the highest Asset Turnover ratio was 1.3828 in 2003, and it bottomed out at 0.8674 in 2020. The upward tick in 2023 continues a positive trend from the dip witnessed during 2020. This resurgence is a positive sign for operational efficiency and may indicate that the company is effectively executing strategies to optimize its asset base.


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