SAKURASAKU PLUSCo.Ltd's (TSE:7097) Solid Earnings Are Supported By Other Strong Factors

SAKURASAKU PLUS,Co.,Ltd.'s (TSE:7097) strong earnings report was rewarded with a positive stock price move. Our analysis found some more factors that we think are good for shareholders.

View our latest analysis for SAKURASAKU PLUSCo.Ltd

How Do Unusual Items Influence Profit?

For anyone who wants to understand SAKURASAKU PLUSCo.Ltd's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥128m 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 SAKURASAKU PLUSCo.Ltd 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 SAKURASAKU PLUSCo.Ltd.

Our Take On SAKURASAKU PLUSCo.Ltd's Profit Performance

Because unusual items detracted from SAKURASAKU PLUSCo.Ltd's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Based on this observation, we consider it likely that SAKURASAKU PLUSCo.Ltd's statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 69% in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you'd like to know more about SAKURASAKU PLUSCo.Ltd as a business, it's important to be aware of any risks it's facing. Our analysis shows 4 warning signs for SAKURASAKU PLUSCo.Ltd (3 are a bit concerning!) and we strongly recommend you look at them before investing.

This note has only looked at a single factor that sheds light on the nature of SAKURASAKU PLUSCo.Ltd's profit. But there are plenty of other ways to inform your opinion of a company. 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. 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.