Last update on 2024-06-07

Mondelez (MDLZ) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

In-depth Piotroski F-Score Analysis for Mondelez (MDLZ) in 2023. Discover its financial strength with a final score of 8 out of 9. Read more for detailed insights.

Short Analysis - Piotroski Score: 8

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

The Piotroski F-Score is a scoring system that evaluates a company's financial health based on nine criteria related to profitability, liquidity, and leverage. Mondelez (MDLZ) achieved a high Piotroski score of 8 out of 9, suggesting strong financial health. Mondelez met the criteria for positive net income, positive cash flow, increasing return on assets, decreasing leverage, growing current ratio, a reduction in outstanding shares, increasing gross margin, and a growing asset turnover ratio. The only criterion it did not meet was having an operating cash flow that was higher than its net income.

Insights for Value Investors Seeking Stable Income

Mondelez (MDLZ) exhibits strong financial health based on the Piotroski F-Score analysis with a score of 8 out of 9. This high score indicates that the company is financially robust, efficient in profitability, and effective in managing its assets and leverage. As an investor, it would be worth considering Mondelez for your portfolio, especially if you value companies with solid financial foundations. However, also consider other factors such as market conditions and industry trends 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 Mondelez (MDLZ)

Company has a positive net income?

Net income measures a company's profitability. Positive net income is indicative of financial health and stability.

Mondelez International (MDLZ) reported a net income of $4.959 billion in 2023, which is a positive figure. This signifies strong profitability, suggesting that the company is efficient in generating revenues and controlling expenses. Looking at the historical data, Mondelez has had a generally positive trend over the past 20 years, with only a few dips, such as in 2014 and 2017. The recent net income in 2023 is not only positive but represents the highest value in the last two decades, indicating robust performance and growth. Therefore, the criterion is met, and Mondelez earns 1 point for positive net income.

Company has a positive cash flow?

Evaluating whether the Cash Flow from Operations (CFO) is positive is a critical measure of a company's operational efficiency and profitability.

For Mondelez (MDLZ) in 2023, the CFO stood at $4.714 billion, which is positive. This trend is favorable, as it indicates that the company is generating sufficient cash from its core operations to sustain and potentially expand its business. Historically, Mondelez has consistently maintained a positive CFO over the last 20 years, with the lowest CFO recorded at approximately $2.598 billion in 2017 and peaking at $6.41 billion in 2013. This persistent positive cash flow reinforces the company's robust business operations, operational efficiencies, and potential for continuing shareholder value generation. Thus, Mondelez earns a full point under this criterion.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) for Mondelez, showing the company's efficiency in generating profits from its assets, which is pivotal for growth assessment.

In 2023, Mondelez's ROA was 0.0696, an increase from 0.0393 in 2022, showing a positive trend. This suggests improved profitability and better asset utilization, gaining 1 point.

Operating Cashflow are higher than Netincome?

The criterion examines if the Operating Cash Flow is higher than the Net Income.

In 2023, Mondelez reported an Operating Cash Flow of $4.71 billion compared to a Net Income of $4.96 billion. This disparity means that Operating Cash Flow is lower than Net Income, thus failing the Piotroski criterion and scoring 0 points. Historically, the cash flow trends illustrate fluctuations, peaking during certain years like 2013 with $6.41 billion, while 2023 reflects a significant uptick compared to preceding years. However, the disparity this year might suggest inefficiencies or non-cash income factors impacting net earnings negatively.

Liquidity of Mondelez (MDLZ)

Leverage is declining?

Change in leverage reflects the adjustment in a company’s debt level relative to its equity, indicating potential financial risk.

For Mondelez (MDLZ), the leverage ratio was 0.2918 in 2022 and decreased to 0.2441 in 2023. This decrease in leverage is a positive signal, reflecting that the company has lowered its debt levels relative to its equity, hence reducing its financial risk. Over the last 20 years, the leverage peaked notably around the 2008 financial crisis at 0.2947, confirming the company's effort to maintain lower leverage levels post-crisis has been effective. Therefore, according to the Piotroski F-Score analysis, Mondelez earns 1 point for reducing leverage in 2023.

Current Ratio is growing?

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

The Current Ratio of Mondelez slightly increased from 0.6031 in 2022 to 0.6155 in 2023, resulting in a 1-point addition according to the Piotroski F-Score criteria. However, it's important to note that Mondelez's Current Ratio not only remains significantly below the industry median of 1.659 in 2023 but has been consistently underperforming compared to industry standards over the past 20 years. Although this year-on-year improvement suggests a marginal enhancement in liquidity, the company's ability to cover its short-term liabilities still remains weaker than that of its peers. The trend of lower Current Ratios observed historically may hint at structural liquidity issues or perhaps different operational strategies compared to the broader industry.

Number of shares not diluted?

The change in shares outstanding measures a company's equity dilution. A decrease signifies buybacks, often interpreted as management's confidence in the firm's value.

In 2023, Mondelez's outstanding shares decreased from 1,378,000,000 (2022) to 1,363,000,000. This decrease earns the company 1 point in the Piotroski analysis. Over the last 20 years, the shares have exhibited a downward trend, often suggesting buybacks, which can indicate a positive signal of confidence from management.

Operating of Mondelez (MDLZ)

Cross Margin is growing?

Change in Gross Margin reveals the ability of the company to efficiently manage its production costs relative to its net sales, reflecting profitability improvements.

Mondelez (MDLZ) has experienced an increase in Gross Margin from 0.3592 in 2022 to 0.3822 in 2023, thereby obtaining 1 point for this Piotroski criterion. The recent Gross Margin (0.3822) surpasses the historical average spanning the last two decades, highlighting a progressive trend in production efficiency and cost control. Furthermore, when juxtaposed with the Industry Median Gross Margin's dipping trend from 0.3397 in 2021 to 0.3072 in 2023, Mondelez showcases robust performance in elevating its profitability margins. Specifically, this rising trend marks an uninterrupted rebound from the dip experienced in 2022. Such a direction is beneficial, particularly in the prevailing competitive landscape as evidenced by the industry's contrary performance paradigm.

Asset Turnover Ratio is growing?

Asset turnover ratio measures the efficiency of a company's use of its assets to generate sales revenue.

In 2023, Mondelez's asset turnover was 0.5053, compared to 0.4556 in 2022. This indicates an increase in asset turnover, adding 1 point to our Piotroski score evaluation. An increased asset turnover means Mondelez is more effectively using its assets to generate revenue, which typically reflects positively on managerial efficiency. Historical data shows a fluctuating trend over the past 20 years, peaking in 2008 at 0.6439 and reaching a low in 2012 at 0.4136. The recent increase aligns with an overall recovering trend since a trough in 2016 (0.4168).