I’ll use Piotroski’s nine variables to get an overview of financial distress risk at March 2021.
2. Does the company produce positive cash flow from operations?
Caffyns generated £4.6m of operating cash flows before movements in working capital, thus a Piotroski point is gained.
3. Has return on assets improved?
A profit in 2021 following a loss in 2020 means an improvement. Third Piotroski point.
4. Is cash flow greater than profits?
Yes. Fourth point scored.
5. Has the ratio of long-term debt to average total assets during the year diminished?
For 2020: £11.8m/£94.7m = 12.46%
For 2021: £12.2m/£95.5m = 12.77%.
No Piotroski point.
6. Has the current ratio improved?
………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
I'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk
investing is about making the right decisions, not many decisions.