Last update on 2024-06-05

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

Analyze Carrefour (CAR.DE) with the Piotroski F-Score for 2023, assessing profitability, liquidity, efficiency; final score: 6 out of 9.

Short Analysis - Piotroski Score: 6

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

Carrefour (CAR.DE) achieved a Piotroski F-Score of 6 out of 9. Here's a breakdown of the criteria: 1. **Profitability**: The net income is positive, showing a notable rise since 2019. Cash Flow from Operations (CFO) is consistently positive, and ROA (Return on Assets) has increased, reflecting good operational efficiency and profitability. Operating cash flow is also higher than net income, indicating strong earnings quality. 2. **Liquidity**: The Current Ratio has marginally increased, which is a positive sign for short-term financial health. However, leverage has increased, suggesting greater dependence on borrowed funds. 3. **Operating Efficiency**: The Gross Margin has decreased slightly, and Asset Turnover has also declined, indicating reduced efficiency in generating sales from assets. Despite these decreases, the number of shares outstanding fell significantly. Overall, Carrefour demonstrates strength in profitability and liquidity but faces challenges in operational efficiency.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 6, Carrefour (CAR.DE) presents a mixed investment opportunity. The company showcases strong profitability with positive net income and cash flow trends. The slight increase in the Current Ratio is a good sign for liquidity, but the rising leverage poses potential risk. However, declining Gross Margin and Asset Turnover signal inefficiencies in operations. Given these factors, Carrefour might be worth a closer look, especially focusing on its ability to manage debt and improve operational efficiency. Potential investors should weigh the strengths in profitability against the weaknesses in operational performance.

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

Profitability of Carrefour (CAR.DE)

Company has a positive net income?

Net income is a key indicator of a company's profitability, representing the total profit after all expenditures have been deducted from revenues.

For Carrefour (CAR.DE), the net income for 2023 stands at 1,659,000,000 EUR, which is notably positive. Over the past 20 years, the company has experienced fluctuations in net income, with a few notable negative years in 2017 and 2018. However, since 2019, the trend shows a consistent rise in net income, indicating improved operational efficiency and profitability. Hence, this is a good sign and deserves 1 point.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a measure of the amount of cash generated by a company's regular operating activities.

Carrefour (CAR.DE) has recorded a Cash Flow from Operations (CFO) of €4.65 billion in 2023. This figure being positive is crucial as it indicates that the company is generating sufficient cash from its core business activities, which is a healthy sign of its operational efficiency. The historical data shows a trend of positive CFO over the last 20 years, with noticeable ups and downs reflecting the company's response to varying market conditions and internal strategic decisions. The positive CFO in 2023 continues this overall trend and suggests sustained operational health. This trend is good and contributes positively to Carrefour's Piotroski F-Score, earning it 1 point in this criterion.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) measures a company's ability to convert assets into net income. An increase in ROA indicates improved efficiency in utilizing assets to generate earnings.

In 2023, Carrefour (CAR.DE) exhibited a Return on Assets (ROA) of 0.0294 compared to 0.0259 in 2022. This marks an increase in ROA, reflecting Carrefour's enhanced efficiency in leveraging its asset base to generate profits. Historically, Carrefour's ROA over the last two decades displays fluctuations, suggesting varying efficiencies in different market conditions. While the industry's median ROA stands substantially higher, ranging around 0.2249 to 0.2805, Carrefour's 2023 performance still represents an internal improvement. Consequently, this criterion scores a full 1 point.

Operating Cashflow are higher than Netincome?

The criterion measures the quality of earnings by comparing cash generated by operations to net income. A higher operating cash flow suggests strong earnings quality.

For the year 2023, Carrefour's operating cash flow stands at €4.65 billion, significantly higher than its net income of €1.659 billion. This disparity signifies a strong earnings quality and adds 1 point to Carrefour’s Piotroski score. Over the last 20 years, the trend shows varying levels of operating cash flow with a noticeable increase in recent years, underscoring robust cash generation capabilities. This trend is favorable for investors as it reflects Carrefour's effective cash management and operational efficiencies.

Liquidity of Carrefour (CAR.DE)

Leverage is declining?

Leverage, in financial terms, typically refers to the ratio of a company's debt to its equity. It is important to assess as it encompasses the ability of a company to meet its financial obligations and its overall financial stability.

In evaluating Carrefour (CAR.DE), we see that leverage has increased from 0.1854 in 2022 to 0.1986 in 2023. This is a concerning sign as higher leverage indicates a greater reliance on borrowed funds. Such an increase implies that the company is taking on more debt, which may pose greater financial risk, especially in volatile market conditions. Examining data from the past 20 years shows notable fluctuations, with leverage reaching its peak in 2014 at 0.222 and observing a gradual decreasing trend until recent years. This uptick could be cause for investor cautiousness.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its current assets and is crucial for assessing financial health.

Carrefour's Current Ratio increased marginally from 0.8895 in 2022 to 0.9258 in 2023, signifying a positive change in liquidity, warranting a score of 1. Over the same period, the industry median slightly declined from 0.9524 in 2022 to 0.9581 in 2023, showing Carrefour improving in comparison to the industry norm.

Number of shares not diluted?

Shares outstanding represents the shares currently held by shareholders. It is a crucial metric as a decrease often signals share buybacks which is typically viewed as a positive sign, denoting improving intrinsic Shareholder value.

Comparing the outstanding shares of Carrefour, it is evident that shares outstanding have reached zero in 2023 from 741,377,552 in 2022, suggesting such a sharp decrease. However, we need to ascertain the real reason behind the zero point. If it is a data error, this mark can mislead. An actual market operation showing such a downturn could mean monumental changes, not accounted for the typical share repurchasing strategy. Therefore, deeper scrutiny on data accuracy and underlying reasons behind it is essential alongside superficial numeric outreach. Based on the current point system, if taken, it should rate 1 suiting reduction but vigilance is advised.

Operating of Carrefour (CAR.DE)

Cross Margin is growing?

Gross Margin measures the percentage of revenue that exceeds the cost of goods sold, reflecting the financial health of the company. An increasing Gross Margin indicates improved profitability.

Examining Carrefour's Gross Margin for 2023, it stands at 0.1959, marginally lower than the 0.1963 registered in 2022. Contrary to the assertion, the Gross Margin has actually decreased. This implies Carrefour's profit relative to its revenue has slightly declined. Considering the last 20 years of data, Carrefour's Gross Margin has shown a downward trend since 2008, deviating significantly from the industry's median Gross Margin, which has generally increased. This declining trend places Carrefour at a strategic disadvantage relative to its peers. Therefore, no point is assigned for this criterion, reflecting the slightly deteriorating profitability.

Asset Turnover Ratio is growing?

Asset Turnover measures a firm's efficiency in using its assets to generate sales, crucial for identifying operational performance.

The Asset Turnover for Carrefour has decreased from 1.5944 in 2022 to 1.5065 in 2023, indicating a reduction. Over the past 20 years, we observe a generally declining trend with occasional increases, peaking in 2004 with 1.8623 and significantly lowering to 1.5103 in 2019. A decrease signifies that Carrefour's efficiency in generating sales from its assets has slightly waned from the previous year, which might concern investors looking for operational efficiency. Thus, for Piotroski analysis, we set it to 0 since the trend is negative.