Are ISC Fresh Water Investment SOCIMI's (BME:YISC) Statutory Earnings A Good Guide To Its Underlying Profitability?

Statistically speaking, it is less risky to invest in profitable companies than in unprofitable ones. That said, the current statutory profit is not always a good guide to a company's underlying profitability. In this article, we'll look at how useful this year's statutory profit is, when analysing ISC Fresh Water Investment SOCIMI (BME:YISC).

It's good to see that over the last twelve months ISC Fresh Water Investment SOCIMI made a profit of €10.7m on revenue of €22.2m. The chart below shows that revenue has improved over the last three years, and, even better, the company has moved from unprofitable to profitable.

View our latest analysis for ISC Fresh Water Investment SOCIMI

Of course, when it comes to statutory profit, the devil is often in the detail, and we can get a better sense for a company by diving deeper into the financial statements. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of ISC Fresh Water Investment SOCIMI.

Our Take On ISC Fresh Water Investment SOCIMI's Profit Performance

Because of this, we think that it may be that ISC Fresh Water Investment SOCIMI's statutory profits are better than its underlying earnings power. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - ISC Fresh Water Investment SOCIMI has 1 warning sign we think you should be aware of.

Our examination of ISC Fresh Water Investment SOCIMI has focussed on certain factors that can make its earnings look better than they are. 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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