TAYD 49.49 (+3.97%)
US8771631053Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-07

Taylor Devices (TAYD) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Explore Taylor Devices (TAYD) Piotroski F-Score Analysis 2023. Get insights into financial strength, profitability, and operational efficiency. Final score: 7/9.

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 Taylor Devices (TAYD) 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?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Taylor Devices (TAYD) scored a 7 on the Piotroski F-Score, which evaluates a company's financial health based on profitability, liquidity, and operating efficiency. The company's net income and operational cash flow are strong and positive, indicating profitability and effective cash generation. The return on assets improved, and the operating cash flow exceeded net income, signifying high-quality earnings. However, an increased leverage ratio and a lower current ratio indicate potential financial risk. Additionally, the number of outstanding shares increased, suggesting minor dilution. The company has shown improvement in gross margin and asset turnover, reflecting better cost management and asset utilization.

Insights for Value Investors Seeking Stable Income

While Taylor Devices (TAYD) demonstrates strong profitability and operational efficiency, there are areas of concern, such as increased leverage and a decreasing current ratio. Overall, the high Piotroski score of 7 indicates good financial health, making it a decent candidate for investment after further scrutiny of the leverage and liquidity concerns. Investors should monitor these factors closely and consider the company’s potential for long-term growth.

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

Profitability of Taylor Devices (TAYD)

Company has a positive net income?

The net income criterion checks whether the company has a positive net income for the year. Positive net income signifies profitability.

Historical Net Income of Taylor Devices (TAYD)

The net income for Taylor Devices (TAYD) in 2023 is $6,287,358. This value is indeed positive, thus fulfilling the criterion, adding 1 point to its Piotroski score. Over the last 20 years, the trend shows variability in net income, but the latest figure stands out as significantly large compared to historical values, indicating a robust financial performance in 2023.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) criterion checks whether the company generates positive cash flow from its core business operations, which is vital for long-term sustainability.

Historical Operating Cash Flow of Taylor Devices (TAYD)

The Cash Flow from Operations (CFO) for Taylor Devices (TAYD) in 2023 is positive at $7,706,779. This is a healthy indicator of the company’s ability to generate cash from its core business activities. Over the last 20 years, TAYD has experienced fluctuations in CFO, with negative values in certain years such as 2005, 2006, 2011, and 2017. However, the positive CFO in recent years, especially the significant value in 2023, showcases an upward trend in operational efficiency. The positive CFO for 2023 adds 1 point in the Piotroski Analysis, signifying a robust operational performance.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) measures a company's profitability relative to its total assets from one period to the next. A positive change indicates improved efficiency in using assets to generate earnings.

Historical change in Return on Assets (ROA) of Taylor Devices (TAYD)

For Taylor Devices (TAYD), the ROA improved significantly from 0.0471 in 2022 to 0.1174 in 2023, marking a 0.0703 increase. This trend is particularly positive, highlighting the company's enhanced ability to utilize its assets to generate profit. Furthermore, while the industry median ROA for 2023 stood at 0.3492, Taylor Devices (TAYD)'s considerable progress is nonetheless commendable given their earlier standing and positions the company towards better alignments with industry leaders. Assigning an additional point for this increase is justified as it signifies notable improvement in financial health and asset utilization.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income: This criterion checks if a company's operating cash flow is greater than its net income, signifying high-quality earnings.

Historical accruals of Taylor Devices (TAYD)

In 2023, Taylor Devices (TAYD) reported an Operating Cash Flow (OCF) of $7,706,779, which is indeed higher than its Net Income of $6,287,358. This disparity implies a positive trend and high-quality earnings. Historically, TAYD has not always displayed such positive cash flow versus net income. For instance, negative OCF was evident in years like 2005 and 2012. The uptick in recent years (2023's OCF) demonstrates improved operational efficiencies. Hence, for this analysis, TAYD earns 1 point.

Liquidity of Taylor Devices (TAYD)

Leverage is declining?

This assesses whether the company's financial leverage has increased or decreased, indicating its level of financial risk.

Historical leverage of Taylor Devices (TAYD)

A company's leverage ratio of 0 in both 2022 and 2023, after decades of maintaining minimal to non-existent leverage, shifted in 2023 as leverage increased. Despite having a leverage ratio consistently at or near 0 for the past two decades (since 2010), leverage rose in 2023, a significant deviation from its past stability. Previously avoiding debt, Taylor Devices adopting leverage suggests a shift in their strategic or financial approach. This increase, negative in piotroski scoring, could reflect amplified financial risk and a potential drain on resources.

Current Ratio is growing?

The current ratio measures a company's ability to pay short-term obligations with its short-term assets. Higher values indicate better liquidity.

Historical Current Ratio of Taylor Devices (TAYD)

In 2023, Taylor Devices (TAYD) had a current ratio of 5.6979, compared to 6.3678 in 2022. This indicates a decrease, given that the ratio is lower in 2023. While TAYD still maintains strong liquidity above the industry median of 1.7757 in 2023, the decrease could point to potentially tighter short-term financial conditions. Hence, for the Piotroski score, this criterion scores 0 points as the current ratio has decreased.

Number of shares not diluted?

Change in Shares Outstanding indicates the company's practice of buying back shares or issuing new shares, impacting shareholder value.

Historical outstanding shares of Taylor Devices (TAYD)

The Outstanding Shares for Taylor Devices (TAYD) have increased from 3,497,345 in 2022 to 3,506,474 in 2023, marking an increase of 9,129 shares. This suggests no active buyback strategy, as a significant portion of their shares have not been reduced. Consequently, this trend would score a 0 point in the Piotroski Analysis. Historically, the Outstanding Shares have slightly increased almost every year in the past two decades, except for minor reductions, displaying a stable and slightly growing share base, which investors should consider when evaluating long-term aspects of share value dilution and financial strategy.

Operating of Taylor Devices (TAYD)

Cross Margin is growing?

Change in gross margin evaluates how a company's profitability is evolving by comparing the proportion of revenue that exceeds cost of goods sold.

Historical gross margin of Taylor Devices (TAYD)

Taylor Devices' gross margin has increased from 0.3119 in 2022 to 0.3997 in 2023. This positive trend signifies an enhancement in operational efficiency or cost management, warranting a score of 1. Analyzing over a 20-year horizon, the company has demonstrated gross margin fluctuations, but it has notably surpassed the industry median of 0.3492 in 2023. This increase aligns positively with long-term profitability.

Asset Turnover Ratio is growing?

Change in Asset Turnover evaluates a company's efficiency in using its assets to generate sales, showing operational effectiveness.

Historical asset turnover ratio of Taylor Devices (TAYD)

In 2023, Taylor Devices' asset turnover ratio is 0.7507, an increase from 0.6488 in 2022. Therefore, this criterion adds 1 point. This positive trend suggests improved efficiency in asset utilization. Historically, the ratio has fluctuated, peaking at 1.2519 in 2012. The current increase signifies a recovery from a downturn observed between 2008 and 2021, indicating operational resilience and better asset management strategies.


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