Shareholders Will Be Pleased With The Quality of Maruo Calcium's (TSE:4102) Earnings

Maruo Calcium Co., Ltd. (TSE:4102) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.

See our latest analysis for Maruo Calcium

How Do Unusual Items Influence Profit?

To properly understand Maruo Calcium's profit results, we need to consider the JP¥33m expense attributed 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 that's hardly a surprise given these line items are considered unusual. If Maruo Calcium 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 Maruo Calcium.

Our Take On Maruo Calcium's Profit Performance

Unusual items (expenses) detracted from Maruo Calcium's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Maruo Calcium's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at an extremely impressive rate over the last year. 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 Maruo Calcium, you'd also look into what risks it is currently facing. To that end, you should learn about the 3 warning signs we've spotted with Maruo Calcium (including 1 which is potentially serious).

Today we've zoomed in on a single data point to better understand the nature of Maruo Calcium'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. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.

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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.