Is There More To The Story Than CyberTech Systems and Software's (NSE:CYBERTECH) Earnings Growth?

Many investors consider it preferable to invest in profitable companies over unprofitable ones, because profitability suggests a business is sustainable. That said, the current statutory profit is not always a good guide to a company's underlying profitability. This article will consider whether CyberTech Systems and Software's (NSE:CYBERTECH) statutory profits are a good guide to its underlying earnings.

It's good to see that over the last twelve months CyberTech Systems and Software made a profit of ₹132.2m on revenue of ₹1.13b. One positive is that it has grown both its profit and its revenue, over the last few years.

View our latest analysis for CyberTech Systems and Software

Not all profits are equal, and we can learn more about the nature of a company's past profitability by diving deeper into the financial statements. This article will discuss how unusual items have impacted CyberTech Systems and Software's most recent profit results. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of CyberTech Systems and Software.

The Impact Of Unusual Items On Profit

Importantly, our data indicates that CyberTech Systems and Software's profit was reduced by ₹54m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect CyberTech Systems and Software to produce a higher profit next year, all else being equal.

Our Take On CyberTech Systems and Software's Profit Performance

Because unusual items detracted from CyberTech Systems and Software's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think CyberTech Systems and Software's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at 32% per year over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you want to do dive deeper into CyberTech Systems and Software, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for CyberTech Systems and Software you should know about.

Today we've zoomed in on a single data point to better understand the nature of CyberTech Systems and Software's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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