Schaeffler AG Stock

When examining the financials of Schaeffler, a prominent company in the Automobiles & Auto Parts industry, an immediate observation is the consistent nature of its total assets, demonstrating a level of stability in its asset base. A closer look into the balance sheets from 2020 to 2022 reveals a gradual improvement in total stockholder equity, which may indicate a strengthening financial position. However, this has to be tempered with the understanding of their liabilities and debt positions.

Pros: ** - **Net Income Growth: There's a visible increase in net income from a loss in 2020 to a profit by 2022, highlighting an improvement in profitability. - EBITDA: With an EBITDA of approximately 1.97 billion EUR for the year 2022, the company shows a strong earning potential before accounting for interest, taxes, depreciation, and amortization. - Stable Gross Profit: The gross profit remains substantial, signifying a solid performance in the core operations of the company. - Liquidity: Cash levels were high in 2021 at 1.60 billion EUR, although there was a decrease in 2022, likely reflecting investments or debt repayments which could be a strategic move for long-term stability. - Receivables and Inventory Management: Changes to receivables and inventory reflect active management of working capital. - Dividend Payments: Commitment to paying dividends shows confidence in ongoing cash flows and shareholder value proposition.

Cons: ** - **Net Debt: The company has a considerable net debt situation, with a net debt of approximately 2.70 billion EUR as of 2022, which could implicate financial flexibility. - Decrease in Cash: A decline in cash and cash equivalents between 2021 and 2022 could indicate potential liquidity challenges. - Capital Expenditures: High capital expenditures, which are essential in the industry for maintaining competitiveness, can also strain cash flows. - Interest Expense: With an interest expense of 124 million EUR in 2022, the cost of carrying debt is non-negligible and impacts net income. - Decreasing Market Capitalization: A market capitalization of 3.36 billion USD may reflect market concerns about the company's future growth or profitability.