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Last update on 2024-06-07

Thyssenkrupp (TKA.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Thyssenkrupp's Piotroski F-Score for 2023 reveals its financial health based on profitability, liquidity, and leverage, scoring a 4 out of 9 points.

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: 4

We're running Thyssenkrupp (TKA.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

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

The Piotroski F-Score is 4 out of 9 for Thyssenkrupp (TKA.DE), which indicates a moderate financial position. The analysis showed mixed results: the company has a positive cash flow, but its net income is negative. The Return on Assets (ROA) declined significantly, highlighting decreased profitability. Thyssenkrupp's leverage has improved, indicating better financial health, but the current ratio and number of shares are largely unchanged. The gross margin and asset turnover ratio have both decreased, signaling declining operational efficiency.

Insights for Value Investors Seeking Stable Income

Given a Piotroski F-Score of 4 and the mixed performance across various financial metrics, Thyssenkrupp (TKA.DE) presents both opportunities and risks. The positive cash flow and decreased leverage are good signs, but the negative net income, declining ROA, and falling gross margin and asset turnover ratio raise concerns about profitability and efficiency. As an investor, you should be cautious and conduct deeper research into the company’s long-term plans and industry conditions before making an investment decision.

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

Profitability of Thyssenkrupp (TKA.DE)

Company has a positive net income?

Net income represents a company's total earnings or profit over a specific period and is crucial for assessing financial health.

Historical Net Income of Thyssenkrupp (TKA.DE)

For Thyssenkrupp (TKA.DE), the net income for 2023 is -2,072,000,000 EUR, which is negative and thus results in 0 points for this Piotroski criterion. Analyzing the net income over the last 20 years, Thyssenkrupp has faced a volatile earnings history, characterized by several periods of significant loses and occasional profits. Notable losses include the years 2009 with -1,873,000,000 EUR, 2011 with -1,783,000,000 EUR, and 2012 with -4,668,000,000 EUR. Despite a massive positive income spike in 2020 with 9,585,000,000 EUR, the company again fell into negative territory. The negative net income in 2023 indicates a challenging financial year, overshadowing any potential progress or stability efforts by the company. Considering the trend, Thyssenkrupp demonstrates high earnings volatility, which stirs concerns about its sustainable profitability.

Company has a positive cash flow?

Cash Flow from Operations is a critical metric that indicates the cash-generating capabilities of a company's core business activities. It is essential for assessing the sustainability of a company's earnings.

Historical Operating Cash Flow of Thyssenkrupp (TKA.DE)

For Thyssenkrupp (TKA.DE), the Cash Flow from Operations (CFO) for the year 2023 is €2,064 million, which is positive, thereby contributing 1 point to the Piotroski F-Score. In terms of trend analysis over the past 20 years, the cash flow has experienced significant fluctuations. For instance, there were periods of highs such as 2006 (€3,467 million) and lows such as 2020 (€-3,326 million), indicating volatility in its core business operations. Despite these fluctuations, the positive cash flow in recent years, including 2023, represents a resilient recovery phase for Thyssenkrupp.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA): Compare the ROA of -0.0585 in 2023 with the ROA of 0.0306 in 2022.

Historical change in Return on Assets (ROA) of Thyssenkrupp (TKA.DE)

In 2023, Thyssenkrupp (TKA.DE) posted a Return on Assets (ROA) of -0.0585, a notable decline from the 0.0306 ROA recorded in 2022. This represents a significant deterioration in the company's profitability relative to its total assets, earning 0 points in this criterion of the Piotroski analysis. This decline underscores potential operational inefficiencies and reduced profitability, a critical concern for stakeholders. Despite short-term volatility, over the last 20 years, Thyssenkrupp's ROA has suffered considerable fluctuations, with negative figures in multiple years (e.g., the dramatic dip to -3.326 billion in 2020). Moreover, Thyssenkrupp has persistently underperformed compared to the industry median, which hovered around 17%-21% over the same period. An in-depth analysis reveals that Thyssenkrupp needs strategic interventions to enhance asset utilization and profitability, mitigating the long-term trend of lagging behind industry peers. Hence, this trend is considered unfavorable.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

Historical accruals of Thyssenkrupp (TKA.DE)

The operating cash flow of €2,064 million in 2023 is higher than the net income of -€2,072 million, resulting in a positive differential indicative of robust cash generation relative to net earnings. This discrepancy underscores the importance of cash flow as a metric devoid of non-cash expenses that might affect net income, thus a crucial indicator of the company’s liquidity and operational efficiency.

Liquidity of Thyssenkrupp (TKA.DE)

Leverage is declining?

Leverage compares a company's debt level to its equity. A decrease suggests better financial health.

Historical leverage of Thyssenkrupp (TKA.DE)

The leverage ratio for Thyssenkrupp has improved from 0.0743 in 2022 to 0.0394 in 2023, showing a significant decrease. This indicates that the company has reduced its reliance on debt in its capital structure. Given the historical data over the last 20 years, this 2023 figure is the lowest, indicating a positive trend towards financial stability. However, because the leverage has actually decreased, we should add 1 point for the Piotroski Score.

Current Ratio is growing?

Explain the criterion for Thyssenkrupp (TKA.DE) and why it is important to consider

Historical Current Ratio of Thyssenkrupp (TKA.DE)

The current ratio serves as an indicator of a company's short-term liquidity, measuring Thyssenkrupp's ability to cover its current liabilities with its current assets. It provides insight into the company's financial stability, indicating whether the firm has enough assets to pay off its short-term debt obligations. A higher current ratio typically suggests better liquidity but can also indicate inefficiency if it is too high. Comparing the current ratios from 2022 and 2023 gives us insight into whether Thyssenkrupp's liquidity position has improved or worsened.

Number of shares not diluted?

Evaluating the change in outstanding shares helps gauge if the company is engaging in significant new equity issuance or buybacks, impacting shareholder value.

Historical outstanding shares of Thyssenkrupp (TKA.DE)

Thyssenkrupp (TKA.DE) reported consistent outstanding shares of 622,531,741 in both 2022 and 2023, indicating no change. Therefore, this criterion scores 0 points according to the Piotroski F-score model, which usually favors stability or buybacks. Over the past two decades, the number of shares has generally increased, with notable issuance in years like 2010, 2012, and 2018.

Operating of Thyssenkrupp (TKA.DE)

Cross Margin is growing?

Gross Margin measures the proportion of money left over from revenues after accounting for the cost of goods sold. It's crucial as it reflects a company's financial health and operational efficiency.

Historical gross margin of Thyssenkrupp (TKA.DE)

ThyssenKrupp's Gross Margin in 2022 was 13.76%, which fell significantly to 7.08% in 2023. This trend is concerning and points toward decreased profitability and operational challenges. Over the past 20 years, the Gross Margin for Thyssenkrupp has generally been volatile, peaking at 18.24% in 2007. Comparatively, the industry median has mostly shown stability, peaking at 20.61% in 2022. Thyssenkrupp's Gross Margin of 7.08% in 2023 is notably below the industry median of 19.23%. Therefore, Thyssenkrupp scores 0 on this Piotroski criterion, indicating a worrying decline in profitability.

Asset Turnover Ratio is growing?

The Change in Asset Turnover criterion compares the company's ability to generate sales from its assets over time.

Historical asset turnover ratio of Thyssenkrupp (TKA.DE)

Comparing the Asset Turnover Ratio for Thyssenkrupp (TKA.DE) from 2022 (1.1074) to 2023 (1.0606), we observe a slight decrease. Specifically, the ratio fell from 1.1074 to 1.0606, resulting in a decline of approximately 0.0468. Consequently, this adds 0 points to the Piotroski Score. Historically, Thyssenkrupp's Asset Turnover has seen fluctuations over the past 20 years, with the highest point in 2007 at 1.4016 and the lowest in 2020 at 0.7921. It's important to note that while this recent decrease may seem minor, a declining asset turnover typically suggests less efficient use of the company's assets to generate revenue, which could be a potential red flag for investors.


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