Last update on 2024-06-07

VERBIO Vereinigte BioEnergie (VBK.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 2/9)

In-depth Piotroski F-Score analysis of VERBIO Vereinigte BioEnergie (VBK.DE) in 2023 reveals financial position with a final score of 2/9.

Short Analysis - Piotroski Score: 2

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

The Piotroski F-Score is a measure used to evaluate the financial stability and operational efficiency of a company, scored out of 9. VERBIO Vereinigte BioEnergie (VBK.DE) has a Piotroski Score of 2, indicating several concerns in its financial health. The analysis covered profitability, liquidity, and operating efficiency: 1. Profitability: Positive net income and cash flow, but a decreasing return on assets and poor operational cash flow relative to net income. 2. Liquidity: Increased leverage but a still healthy current ratio. Issue of share dilution noted. 3. Operating efficiency: Decreased gross margin and asset turnover, indicating declining operational efficiency.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 2, it suggests caution for potential investors in VERBIO Vereinigte BioEnergie (VBK.DE). Despite some positive signs like positive net income and cash flow, the overall picture shows concerns in profitability trends, debt usage, share dilution, and operational efficiency. Only if the company addresses these concerns and shows improvement in efficiency and financial stability, it would be recommended for investment. Due to the current mix of volatility and negative indicators, it may be wise to look for more stable opportunities.

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

Profitability of VERBIO Vereinigte BioEnergie (VBK.DE)

Company has a positive net income?

Net income represents the company's profitability and is crucial for assessing its financial health.

In 2023, VERBIO Vereinigte BioEnergie (VBK.DE) reported a net income of €132,024,000, marking positive profitability. Historically, their net income has shown significant volatility, especially a stark loss of €-152,513,000 in 2013 and a high of €315,625,000 in 2022. With positive results in recent years, their trend is favorable, scoring 1 point in Piotroski.”

Company has a positive cash flow?

Examine if the company's Cash Flow from Operations (CFO) is positive or negative. It indicates the amount of cash generated by regular business operations and its ability to maintain and grow operations.

In 2023, VERBIO Vereinigte BioEnergie (VBK.DE) reported a Cash Flow from Operations (CFO) of €26,094,000. This is a positive cash flow, earning the company 1 point on this criterion. This positive result reflects the company's ability to generate cash through its core business activities, which is a crucial indicator of financial health and operational efficiency. Examining the historical data over the past 20 years, VERBIO's CFO has shown a pattern of fluctuations. The company experienced years of negative cash flows, such as in 2008 (-€84,171,000), 2010 (-€32,708,000), and 2013 (-€19,511,000), interspersed with years of positive cash flows like 2009 (€68,385,000) and 2015 (€46,612,000). Most notably, the CFO reached its peak in 2022 with €325,031,000. The fluctuation in cash flows could be influenced by various operational, market, and management factors, yet the sustained positive CFO over recent years highlights steady improvements in operational performance. Overall, a positive cash flow in the latest year is a good sign, indicating that the company has maintained healthy operations and is financially resilient.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) evaluates the year-over-year improvement in the company's ability to generate profit from its assets. A higher ROA indicates greater efficiency in asset utilization.

For VERBIO Vereinigte BioEnergie (VBK.DE), the Return on Assets (ROA) decreased from 0.3493 in 2022 to 0.1088 in 2023. This substantial decline suggests a diminished efficiency in converting assets into net income. Further context reveals that fluctuating operating cash flows in recent years, including a peak of €325.03 million in 2022 followed by a drop to €26.09 million in 2023, might have influenced ROA. Additionally, the company’s ROA in 2023 is substantially below the Industry Median ROA of 0.194, signaling underperformance in asset utilization compared to peers. Hence, this criterion scores 0 point.

Operating Cashflow are higher than Netincome?

The criterion checks if Operating Cash Flow is higher than Net Income, which indicates that the company is generating ample cash from its operations relative to its reported profits. This aspect is crucial as it demonstrates robust cash management and operational efficiency, lending strength to financial health.

In 2023, VERBIO's Operating Cash Flow is EUR 26,094,000, which is significantly lower than the Net Income of EUR 132,024,000. This denotes a failure in achieving operational cash flow in line with net profit. Over the last two decades, VERBIO has experienced fluctuations in its Operating Cash Flow and Net Income, as explored chronologically: from a severe deficit in 2008 (-EUR 84,171,000) to substantial surpluses in recent years (e.g., EUR 325,031,000 in 2022). This volatility can suggest inconsistencies in operational cash generation relative to profitability. Specifically, analyzing the accruals indicates an accrual-based income strategy in various years, showing higher net income relative to actual cash flow, except for few instances. This varying ratio reduces reliability on profitability metrics for cash-based strength; hence, this criterion scores 0 points.

Liquidity of VERBIO Vereinigte BioEnergie (VBK.DE)

Leverage is declining?

The criterion assesses the year-over-year change in leverage ratios to understand a company's debt levels.

In 2023, VERBIO Vereinigte BioEnergie's leverage increased to 0.1044 from 0.0394 in 2022, suggesting an upward trend in debt usage to finance its activities. This represents a negative indicator, thus earning 0 points in this category. Leveraging increased during past years; notably, in 2020 leverage was notably high at 0.0809 from virtually zero in the previous two years. Hence, this upward shift indicates the company may be increasingly relying on debt, raising concerns about their financial stability and repayment capabilities.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term obligations with its short-term assets. A higher Current Ratio indicates greater liquidity, which can be crucial for operational stability.

As of 2023, VERBIO Vereinigte BioEnergie (VBK.DE) exhibits a Current Ratio of 2.5848, which is a slight decrease from the 2.6031 recorded in 2022. This downward trend, although marginal, suggests a minor decrease in the company's liquidity position. However, over the past 20 years, the company's Current Ratio has consistently remained above the industry median. For instance, the industry median Current Ratio in 2023 is 1.0239, significantly lower than VERBIO's ratio. This consistency reaffirms VERBIO's relatively strong liquidity position despite the minor decline. Given that the Current Ratio has decreased, this criterion receives a score of 0.

Number of shares not diluted?

Change in Shares Outstanding measures whether the number of shares a company has issued has increased or decreased. Fewer shares indicate management is confident, while more may dilute value.

The Outstanding Shares have increased from 63,236,468 in 2022 to 63,430,269 in 2023. This represents an increase of approximately 193,801 shares, or 0.31%. This trend is generally not favorable, as an increase in outstanding shares can indicate potential dilution of existing shareholders’ value. Over the last 20 years, the number of shares has mostly remained stable around 63,000,000, apart from slight decreases and the recent increases. This unexpected rise in 2023 might affect investor sentiment but is minimal. Therefore, for the Piotroski F-Score, 0 points will be given for this criterion.

Operating of VERBIO Vereinigte BioEnergie (VBK.DE)

Cross Margin is growing?

The Change in Gross Margin criterion examines the year-over-year change in a company's gross profit as a percentage of sales. This metric is crucial as it provides insight into operational efficiency and pricing strategy.

For VERBIO Vereinigte BioEnergie (VBK.DE), the Gross Margin has decreased from 0.3459 in 2022 to 0.194 in 2023. This represents a significant decline, indicating potential issues in cost management or pricing power. The decadal trend was largely increasing from 2013 until 2022, followed by a sharp drop in the latest year. This drop is also mirrored by the industry median Gross Margin, which suggests sector-wide challenges. Hence, for this criterion, VERBIO scores 0 points as its Gross Margin did not increase.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets to generate sales revenue. It is calculated by dividing sales revenue by total assets and can indicate operational efficiency.

In 2023, the Asset Turnover for VERBIO Vereinigte BioEnergie (VBK.DE) was 1.6228, down from 2.0058 in 2022. This shows a decline, indicating less efficient use of the company's assets to generate revenue compared to the previous year. This downward trend is not favorable, and thus we add 0 points for this criterion. Reviewing historical data, the Asset Turnover has seen fluctuations, reaching highs in periods such as 2014 (2.058) and 2016 (2.1129), suggesting variability in operational efficiency over the years. The decline from 2022 to 2023 contributes to the less positive outlook.