Should You Use CB GROUP MANAGEMENT's (TYO:9852) Statutory Earnings To Analyse It?

Statistically speaking, it is less risky to invest in profitable companies than in unprofitable ones. However, sometimes companies receive a one-off boost (or reduction) to their profit, and it's not always clear whether statutory profits are a good guide, going forward. In this article, we'll look at how useful this year's statutory profit is, when analysing CB GROUP MANAGEMENT (TYO:9852).

While CB GROUP MANAGEMENT was able to generate revenue of JP¥150.1b in the last twelve months, we think its profit result of JP¥687.0m was more important. The chart below shows that revenue has been flat over the last three years, while profit has actually declined.

Check out our latest analysis for CB GROUP MANAGEMENT

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. This article will discuss how unusual items have impacted CB GROUP MANAGEMENT'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 CB GROUP MANAGEMENT.

The Impact Of Unusual Items On Profit

Importantly, our data indicates that CB GROUP MANAGEMENT's profit was reduced by JP¥258m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. 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. If CB GROUP MANAGEMENT doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

Our Take On CB GROUP MANAGEMENT's Profit Performance

Because unusual items detracted from CB GROUP MANAGEMENT'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 CB GROUP MANAGEMENT's earnings potential is at least as good as it seems, and maybe even better! Unfortunately, though, its earnings per share actually fell back 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. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 3 warning signs for CB GROUP MANAGEMENT (of which 2 make us uncomfortable!) you should know about.

This note has only looked at a single factor that sheds light on the nature of CB GROUP MANAGEMENT'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. 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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