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Last update on 2024-06-07

Grenke (GLJ.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Analysis of Grenke (GLJ.DE) using the Piotroski F-Score for 2023 reveals a final score of 6/9, covering key financial metrics like profitability and liquidity.

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: 6

We're running Grenke (GLJ.DE) 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?
0
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is used to evaluate a company's financial strength. Grenke (GLJ.DE) scored a 6 out of 9, which is above average. Let's break it down: *Profitability:* Grenke is profitable, with a positive net income and higher operating cash flow than net income in 2023. However, its Return on Assets (ROA) has slightly decreased. *Liquidity:* The company has improved its current ratio, meaning its ability to cover short-term debts has gotten better. However, leverage has slightly increased. *Operating Efficiency:* The gross margin has decreased, signaling less efficiency in managing production costs, but the asset turnover ratio has improved.

Insights for Value Investors Seeking Stable Income

Overall, Grenke has a score of 6, indicating decent financial health and some positive trends. It is performing well in profitability and has better liquidity this year, but there are areas of concern like declining gross margins and slight increase in leverage. If you're a potential investor, it might be worth looking into Grenke for its strengths while being mindful of its weaknesses. Consider researching further or consulting a financial advisor to make an informed decision.

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

Profitability of Grenke (GLJ.DE)

Company has a positive net income?

This criterion checks if the company has generated positive net income in the most recent fiscal year. A positive net income indicates profitability, which is a crucial factor in assessing a company's financial health.

Historical Net Income of Grenke (GLJ.DE)

For the fiscal year 2023, Grenke (GLJ.DE) reported a net income of €92,316,000. This indicates that the company is profitable. Historically, over the last 20 years, Grenke has shown a positive net income from 2008 onwards, with steady increases in the subsequent years, except for minor dips in 2020 and 2022. Hence, this consistent profitability pattern is favorable and earns the company 1 point in the Piotroski Analysis for the Net Income criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a vital measure of a company's operational efficiency and liquidity, representing the cash generated by its regular business operations.

Historical Operating Cash Flow of Grenke (GLJ.DE)

Grenke (GLJ.DE) boasts a positive CFO of 329,251,000 euros for 2023. This figure is notably important as it reflects the company's ability to generate ample cash flow from its operations, vital for maintaining and expanding its business without relying heavily on external financing. Over the past 20 years, Grenke's CFO has shown significant volatility, ranging from a low of -346,839,000 euros in 2021 to a high of 567,187,000 euros in 2020. The trend suggests a stabilization and improvement from recent negative fluctuations, placing Grenke in a better financial position. This positive trend draws attention to Grenke's resilience and operational efficiency—metrics valued by investors. Therefore, for the year 2023, a score of 1 point should be assigned for this criterion.

Return on Assets (ROA) are growing?

The criterion examines whether a company’s Return on Assets (ROA) has increased. ROA measures a company’s efficiency in generating profit from its assets and is important for assessing operational efficiency and profitability trends.

Historical change in Return on Assets (ROA) of Grenke (GLJ.DE)

Grenke's (GLJ.DE) ROA slightly decreased from 0.0138 in 2022 to 0.0137 in 2023, leading to a score of 0 for this criterion. Although this decline is very minimal, it indicates a slight drop in asset efficiency. Moreover, when compared to the industry median ROA, which historically has been significantly higher than Grenke’s ROA (averaging above 0.65 over the past two decades), Grenke’s ability to generate returns on its assets appears to be less robust. This underperformance in ROA could signal potential disadvantages in either asset utilization or profitability strategies.

Operating Cashflow are higher than Netincome?

The criterion checks whether the Operating Cash Flow (OCF) is higher than the Net Income (NI). This is important as it reveals the company's ability to generate sufficient cash to sustain operations.

Historical accruals of Grenke (GLJ.DE)

In 2023, Grenke's Operating Cash Flow stands at €329.25 million, considerably higher than its Net Income of €92.32 million. This suggests that Grenke has a robust capability to generate cash from its core business operations. Historically, Grenke has shown inconsistent OCF figures, often fluctuating from negatives to positives over the past two decades. Moreover, the fact that OCF greatly surpasses NI by around €236.9 million is a favorable indicator of Grenke’s financial health. Therefore, this criterion scores 1 point, reflecting a positive trend.

Liquidity of Grenke (GLJ.DE)

Leverage is declining?

Change in Leverage measures the variation in financial leverage ratios from one year to the next. It is crucial for identifying trends in a company's debt dependency and overall financial health, with a decrease indicating a potential reduction in financial risk.

Historical leverage of Grenke (GLJ.DE)

The leverage for Grenke (GLJ.DE) has imperceptibly increased from 0.3504 in 2022 to 0.3699 in 2023. Although marginal, this uptick results in a failure to secure a point under Piotroski's F-Score criterion. Having commended improvement in 2021 and 2022, the reversal might reflect an incremental rise in debt levels relative to its equity.In 2021 leverage was at 0.3756 and through sequential decreases to 2022, then not adjusting to the tipping point in 2023 might signal caution and enhance leverage volatility risk if repeated in subsequent years

Current Ratio is growing?

The Current Ratio compares a company's current assets to its current liabilities. It's a key indicator of short-term liquidity.

Historical Current Ratio of Grenke (GLJ.DE)

Grenke (GLJ.DE) has witnessed an increase in its Current Ratio from 1.1653 in 2022 to 1.557 in 2023, showing improved short-term liquidity. This is a favorable trend and adds 1 point to the Piotroski score. Over the past two decades, Grenke's Current Ratio has fluctuated, often trailing the industry median. While Grenke's Current Ratio of 1.557 in 2023 surpasses the industry median of 1.4517, consistent improvement is vital for sustainable growth. In summary, the rise to 1.557 indicates a positive move for Grenke's financial health.

Number of shares not diluted?

Changes in shares outstanding measure the company's share capital adjustments, which can affect earnings per share and thus investor sentiment. A decrease usually signals management's confidence in strong future cash flows.

Historical outstanding shares of Grenke (GLJ.DE)

The outstanding shares of Grenke (GLJ.DE) remained constant at 46,495,573 from 2022 to 2023 with no decrease. Reviewing the historical data, we observe consistent or incrementing share trends with specific increments observed in multiple years (e.g., from 46.3 million in 2019 to 46.4 million in 2020). This stability in share count for 2023 thus scores 0 points under Piotroski's criterion for share reduction, as no reduction has occurred. This lack of reduction is neither inherently positive nor negative but signals no immediate extraordinary financial confidence requiring repurchase or retirement of shares at this stage.

Operating of Grenke (GLJ.DE)

Cross Margin is growing?

The criterion assesses if a company's gross margin, which is the sales revenue minus its cost of goods sold, relative to its sales revenue, has improved over a certain period. A higher gross margin indicates a company's efficiency in managing its production costs.

Historical gross margin of Grenke (GLJ.DE)

For Grenke (GLJ.DE), the gross margin in 2023 is 0.5421 compared to 0.6261 in 2022, indicating a decrease. Therefore, no point is added for this metric. This trend suggests that Grenke has become less efficient at managing its production costs year over year. Looking at the historical data, Grenke's gross margin had been generally volatile, with significant peaks and troughs - it peaked sharply at 0.7394 in 2019, followed by a consistent decrease through 2023. In contrast, the industry median, although it vanished in 2023, shows a pattern of generally higher gross margins in recent years. The decline in Grenke's gross margin from 2022 to 2023 is particularly concerning as it not only indicates weaker internal cost management but also positions Grenke less favorably against its industry peers, who demonstrated gross margins far above Grenke's most recent figures. In view of these observations, it leads us to assign a score of 0 for this indicator.

Asset Turnover Ratio is growing?

Asset Turnover compares the revenue a company generates relative to its assets. An increase indicates improved efficiency.

Historical asset turnover ratio of Grenke (GLJ.DE)

In 2022, Grenke (GLJ.DE) had an Asset Turnover of 0.0939, which increased to 0.1017 in 2023. This increment reflects improved asset utilization and efficiency, earning a point in the Piotroski analysis. Over the last 20 years, despite some fluctuations, the recent rise marks a positive trend in financial health, particularly after a notable dip from 0.5432 in 2015 to a low of 0.087 in 2021.


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