Tokyo Ichiban Foods' (TSE:3067) Earnings May Just Be The Starting Point

Tokyo Ichiban Foods Co., Ltd. (TSE:3067) just reported healthy earnings but the stock price didn't move much. Our analysis suggests that investors might be missing some promising details.

See our latest analysis for Tokyo Ichiban Foods

How Do Unusual Items Influence Profit?

For anyone who wants to understand Tokyo Ichiban Foods' profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥45m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Tokyo Ichiban Foods doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Tokyo Ichiban Foods.

Our Take On Tokyo Ichiban Foods' Profit Performance

Unusual items (expenses) detracted from Tokyo Ichiban Foods' earnings over the last year, but we might see an improvement next year. Because of this, we think Tokyo Ichiban Foods' 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 an extremely impressive rate over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example - Tokyo Ichiban Foods has 1 warning sign we think you should be aware of.

Today we've zoomed in on a single data point to better understand the nature of Tokyo Ichiban Foods' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.