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Mercedes-Benz Group (MBG.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

In-depth Piotroski F-Score analysis for Mercedes-Benz Group (MBG.DE) in 2023. Final score: 6/9, highlighting profitability, liquidity, and 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: 6

We're running Mercedes-Benz Group (MBG.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 for Mercedes-Benz Group (MBG.DE) is 6 out of a possible 9, indicating a fairly strong financial position. The scoring considered nine different financial criteria: profitability, liquidity, and operating efficiency. MBG.DE scored positively on profitability for positive net income and operating cash flow, though it showed a small decrease in ROA. The liquidity and operating efficiency were also mixed -- while the current ratio and asset turnover ratio saw improvements, the company's leverage increased, and gross margins showed a minor decline. The decrease in the number of shares outstanding positively impacted shareholder value.

Insights for Value Investors Seeking Stable Income

Given the Piotroski F-Score of 6, Mercedes-Benz Group (MBG.DE) shows a strong but not impeccable financial standing. Despite some minor setbacks, the consistent profit, adequate liquidity, and efficient use of assets make it a relatively healthy investment option. Investors might consider it a worthy stock to investigate further, especially focusing on longer-term performance and the company's strategy to manage its debt and improve margins. Paying attention to industry comparisons and future projections can also provide critical insights before making investment decisions.

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

Profitability of Mercedes-Benz Group (MBG.DE)

Company has a positive net income?

The net income criterion checks if the company has generated a positive net income for the year. A positive net income is crucial as it signifies profitability and good financial health, crucial for shareholder value.

Historical Net Income of Mercedes-Benz Group (MBG.DE)

For the fiscal year 2023, Mercedes-Benz Group (MBG.DE) reported a net income of €14,261,000,000. This is a positive figure, which is a strong indication of the company's profitability. Comparing this value to the net income over the last 20 years, Mercedes-Benz Group has shown consistent profitability with only one negative net income year in 2009 (-€2,640,000,000). Particularly notable is the trend from 2010 onwards, where net income figures have routinely exceeded €2 billion, peaking in 2021 with €23,060,000,000. Consequently, based on this criterion, MBG.DE earns 1 point.

Company has a positive cash flow?

Positive cash flow from operations (CFO) is essential as it indicates that a company can generate sufficient cash to maintain and grow its operations, repay debts, and reinvest in the business.

Historical Operating Cash Flow of Mercedes-Benz Group (MBG.DE)

For the year 2023, Mercedes-Benz Group has reported a positive CFO of €14,470,000,000. This substantial figure suggests that the company has a strong capacity for generating operational cash, which is critical for sustaining its business activities and investing in future growth. Historically, the company has had fluctuations in its CFO with several negative years, such as in 2011, 2013, 2015, and 2018, but since 2020, the CFO has been markedly positive. This improving trend adds confidence in the company's operational stability and liquidity, thus earning it 1 point for positive CFO in 2023.

Return on Assets (ROA) are growing?

Change in ROA (Return on Assets) is a critical indicator in the Piotroski Score analysis. It shows the company's ability to turn assets into profits more efficiently year over year, which can signal improving business health.

Historical change in Return on Assets (ROA) of Mercedes-Benz Group (MBG.DE)

Comparing the ROA values, Mercedes-Benz Group saw a slight decline from 0.0558 in 2022 to 0.0545 in 2023. Unfortunately, this implies a decrease of approximately 2.33%, resulting in no additional point being awarded under the Piotroski Score metric. Historically, this reduced effectiveness in utilizing asset base reflects more significant hurdles the company might be facing, though this marginal dip should be carefully weighed against broader economic conditions. Interestingly, comparing the 2023 ROA with the industry median of 0.1825, Mercedes-Benz Group lags significantly, hinting at potential strategic inefficiencies or higher-than-average asset bases compared to returns.

Operating Cashflow are higher than Netincome?

This criterion evaluates whether the company's operating cash flow is higher than its net income, indicating high-quality earnings. Strong operating cash flow relative to net income demonstrates that the company's earnings are backed by real cash flows, making it a positive financial indicator.

Historical accruals of Mercedes-Benz Group (MBG.DE)

For the fiscal year 2023, Mercedes-Benz Group (MBG.DE) reported an operating cash flow of €14.47 billion compared to a net income of €14.26 billion. This results in an operating cash flow that is higher than the net income by approximately €210 million. As per the Piotroski Analysis, this is a positive indicator pointing towards high-quality earnings backed by solid cash flows. This earns Mercedes-Benz a point under this criterion. Examining the historical data, Mercedes-Benz has shown variability in their operating cash flows and net income over the past two decades. The trends reveal several years where operating cash flow dipped below net income, particularly around 2009 during the financial crisis. Recent years, however, display robustness in operating cash flows reinforcing the trend seen in 2023. Additionally, the accruals over the years have shown different trends, confirming the need to assess cash flow-based metrics over earnings.Overall, the 2023 data presents a strong case for financial stability and quality earnings for the Mercedes-Benz Group.

Liquidity of Mercedes-Benz Group (MBG.DE)

Leverage is declining?

Change in leverage measures the degree to which a company is financing its operations through debt versus wholly-owned funds. Lower leverage implies less risk.

Historical leverage of Mercedes-Benz Group (MBG.DE)

The leverage of Mercedes-Benz Group (MBG.DE) increased from 0.1984 in 2022 to 0.2095 in 2023, indicating a rise in the company's use of debt to finance its activities. Over the past 20 years, the company's leverage has seen significant fluctuations, peaking at 0.4132 in 2006 and hitting a low of 0.0866 in 2015. This recent increase in leverage is a negative indicator for our criterion, yielding 0 points for this measure. A rising leverage ratio can suggest growing financial risk, which may concern investors who prefer companies maintaining stable and lesser debt ratios. Ultimately, this increase needs careful monitoring to ensure it does not signal the onset of further debt-related financial vulnerabilities.

Current Ratio is growing?

The Current Ratio assesses a company's ability to pay short-term obligations with its short-term assets. A higher ratio indicates better liquidity.

Historical Current Ratio of Mercedes-Benz Group (MBG.DE)

The Current Ratio of Mercedes-Benz Group (MBG.DE) increased to 1.262 in 2023 from 1.1637 in 2022. This indicates improved liquidity, as the company is now better positioned to cover its short-term liabilities with short-term assets. Adding to that, the company's Current Ratio in 2023 matches the industry median of 1.262, reflecting it has aligned itself with industry standards. Comparing this trend against historical data, Mercedes-Benz has generally maintained stability in its Current Ratio, fluctuating narrowly around the 1.1-1.2 range over the past two decades. This uptick to 1.262 represents a positive shift and earns a point in the Piotroski Analyses grid. Thus, the trend is good.

Number of shares not diluted?

The criterion considers changes in shares outstanding as issuing new shares could dilute existing shareholders' value, whereas buying back shares can enhance shareholder value.

Historical outstanding shares of Mercedes-Benz Group (MBG.DE)

For Mercedes-Benz Group, the outstanding shares have decreased from 1,069,800,000 in 2022 to 1,059,600,000 in 2023, resulting in an addition of one point. This decrease indicates a healthy sign of stock buybacks, reflecting positively on shareholder value. Historical data shows that shares outstanding peaked sharply in 2007 and again in 2011 but have shown a relative stability in recent years, including the recent reduction.

Operating of Mercedes-Benz Group (MBG.DE)

Cross Margin is growing?

The Gross Margin criterion assesses whether a company's gross margin has improved. A higher gross margin indicates higher efficiency in terms of production and selling.

Historical gross margin of Mercedes-Benz Group (MBG.DE)

For 2023, Mercedes-Benz Group (MBG.DE) recorded a gross margin of 0.2244, slightly down from 0.2268 in 2022. This decrease signifies a regression in efficiency compared to the previous year and, under Piotroski's rules, would not add a point to the score. Additionally, over the past 20 years, Mercedes-Benz has generally maintained a gross margin higher than the industry's median. In 2023, the gross margin remained above the industry median of 0.1825, demonstrating resilience despite the recent year's slight decrease. However, the trend remains concerning as it could forecast a persistence in decreased margins if systemic issues are not addressed. Therefore, this criterion scores 0 points in the Piotroski Analysis.

Asset Turnover Ratio is growing?

Asset turnover measures a firm's efficiency at using its assets to generate revenue. It is calculated by dividing sales by total assets.

Historical asset turnover ratio of Mercedes-Benz Group (MBG.DE)

In 2023, Mercedes-Benz Group's asset turnover ratio increased to 0.5859 from 0.5772 in 2022. This positive trend indicates that the company has improved its efficiency in utilizing its assets to generate revenue. Observing the historical data for the past 20 years, which shows fluctuations but a recent upward trend from 0.4141 in 2020 to the present 0.5859, underscores a recovery and enhancement in operational efficiency. The increase, although modest, provides a 1 point addition according to the Piotroski Analyses criteria, reflecting a small but favorable trend for stakeholders.


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