Last update on 2024-06-07

Ansys (ANSS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Analyze Ansys (ANSS) with Piotroski F-Score 2023. Discover how it scores 8/9 using key financial criteria like profitability, liquidity, and efficiency.

Short Analysis - Piotroski Score: 8

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

Ansys (ANSS) has been assessed using the Piotroski F-Score, which is a measure from 0 to 9 based on nine financial criteria reflecting profitability, liquidity, and operating efficiency. Ansys scored 8 out of 9, indicating a very strong financial position. Key findings include a consistent positive net income, strong cash flow from operations, and an improving current ratio. The company also demonstrated a decrease in leverage and a slight reduction in outstanding shares, reflecting sound financial management. Although there was a decline in Return on Assets, most other metrics such as gross margin and asset turnover showed improvement or positive trends.

Insights for Value Investors Seeking Stable Income

Based on Ansys' high Piotroski F-Score of 8, it is recommended to highly consider this stock for investment. The company demonstrates robust financial health, strong profitability, and effective management of debts and cash flow. The consistency in positive net income and cash flow over the years further solidify its position as a potentially stable and rewarding investment. However, keep an eye on the Return on Assets and conduct a deeper analysis of operational efficiency.

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

Profitability of Ansys (ANSS)

Company has a positive net income?

Net income is a critical indicator of a company's profitability. Positive net income generally signifies a healthy company that is succeeding in its operations and generating positive earnings for shareholders.

Ansys (ANSS) has reported a net income of $500,412,000 in 2023, which is positive. This marks a good trend for the company, adding 1 point in the Piotroski score for this criterion. Over the past 20 years, Ansys has consistently shown positive net income figures, demonstrating solid profitability. For instance, back in 2003, the net income was just $21,313,000, and it has generally trended upwards, hitting peaks and valleys along the way but showing overall progress. Their highest net income in the past 20 years was in 2021, with $523,710,000. The positive net income for 2023 indicates that the company is continuing to perform well financially.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the cash a company generates from its regular business operations. Positive CFO is vital as it showcases the company's ability to generate sufficient cash to maintain and grow its operations long-term.

In 2023, Ansys (ANSS) reported a CFO of $717,122,000, which is positive. Over the past 20 years, the company has seen a mostly consistent increase in operating cash flow, highlighting strong and growing operational efficiency. For instance, the CFO moved from $38,806,000 in 2003 to $717,122,000 in 2023, indicating robust cash-generating capabilities and efficient business operations. This positive trend is a good sign for investors and adds 1 point to the Piotroski score.

Return on Assets (ROA) are growing?

Return on Assets (ROA) is a key indicator of how efficiently a company is utilizing its assets to generate profit. A higher ROA indicates better performance and efficiency.

In 2023, Ansys (ANSS) reported an ROA of 0.0714, which is lower than the 0.0805 achieved in 2022. This represents a decline in ROA, signaling the company was less efficient in utilizing its assets to generate profit this year compared to the previous year. Consequently, Ansys scores 0 points for this criterion in the Piotroski Analysis. Historically, the company maintained a moderate trajectory in its ROA, emphasizing the need for a deeper examination into operational efficiency improvements moving forward. Furthermore, comparing to the industry median ROA over the last 20 years which ranged from about 0.6192 to 0.6741, Ansys also falls significantly behind in its asset utilization efficiency.

Operating Cashflow are higher than Netincome?

This criterion compares Operating Cash Flow to Net Income. It's crucial as it checks if a company generates enough operating cash to exceed its net profit, indicating strong cash management.

For 2023, Ansys (ANSS) had an Operating Cash Flow of $717.12 million, significantly exceeding its Net Income of $500.41 million. This results in a score of 1 for this criterion.Over the last 20 years, the trend has improved, notably from $38.81 million (2003) to $717.12 million (2023) in Operating Cash Flow, showing Ansys's robust cash flow generation ability. Such positive cash flow exceeding net income consistently indicates that the company has an adequate cushion to cover its expenses and explore growth opportunities, pointing to sound financial health.

Liquidity of Ansys (ANSS)

Leverage is declining?

Change in Leverage measures the evolution of a company's debt relative to its equity, reflecting reduced financial risk.

For Ansys (ANSS), the Leverage has decreased from 0.1295 in 2022 to 0.1167 in 2023, indicating a positive trend. Historically, the company's Leverage has seen periods of no debt (e.g., between 2011-2017) and fluctuations, yet from 2020-2021, it spiked to 0.1547 before gradually decreasing. The dropping leverage in 2023 suggests disciplined financial management as the company reduces its reliance on debt financing. This trend is fundamentally good, awarded 1 point, reinforcing a risk-averse financial strategy.

Current Ratio is growing?

The Current Ratio measures a company's ability to cover its short-term liabilities with its short-term assets.

With the Current Ratio of Ansys (ANSS) increasing from 2.0937 in 2022 to 2.3047 in 2023, this indicates an improved liquidity position, earning a score of 1 point in the Piotroski analysis. It's a positive trend as Ansys's current ratio not only increased but also stands well above the industry median of 1.7519 in 2023. Historically, Ansys’s current ratio has fluctuated but has generally remained robust, especially compared to the industry median. This increase shows that Ansys is well-positioned to manage its short-term obligations.

Number of shares not diluted?

Change in shares outstanding is crucial as it can dilute or concentrate earnings per share, affecting investor value.

Upon examining Ansys' outstanding shares, it's evident that the number has decreased from 87,051,000 in 2022 to 86,833,000 in 2023, implying a slight reduction. This reduction receives a point (1) based on Piotroski's criteria, signaling positive governance and possibly share buybacks. Historically, the gradual decline in outstanding shares since 2015, except for a slight rise in 2020, aligns with this trend and reflects positively on the management's strategy to enhance shareholder value by reducing dilution.

Operating of Ansys (ANSS)

Cross Margin is growing?

The criterion is the change in gross margin from one year to the next. A higher gross margin indicates better efficiency in producing goods or services while keeping costs low, leading to increased profitability. This metric is crucial as it reflects a company's operational efficiency.

The Gross Margin for Ansys (ANSS) has indeed increased from 0.8787 in 2022 to 0.8805 in 2023. This rise suggests an improvement in the company's operational efficiency, affording it a score of 1 in this criterion. Over the last 20 years, ANSS's gross margin has consistently outpaced the industry median. This sustained performance showcases the company's strong competitive positioning and adept cost management strategies. For example, in 2003, the gross margin was 0.8373 while the industry median was 0.6192, indicating a notable competitive edge early on, which has continued throughout the years.

Asset Turnover Ratio is growing?

Asset Turnover is a measure of a company's efficiency in using its assets to generate sales. It is important because it indicates how well the management is employing the company's assets to produce revenue.

Between 2022 and 2023, Ansys' Asset Turnover increased from 0.3175 to 0.324. While this improvement is modest, it demonstrates a positive trend whereby the company has become slightly more efficient in utilizing its assets to generate sales. Over the last 20 years, Ansys' Asset Turnover has generally decreased, but the recent increase is a good sign. For example, in 2009, the Asset Turnover was 0.2731, and it has gradually improved to its current level. Given the criteria, Ansys would add 1 point for the increase in Asset Turnover.