Should You Use EASY HOLDINGS' (KOSDAQ:035810) Statutory Earnings To Analyse It?

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. Today we'll focus on whether this year's statutory profits are a good guide to understanding EASY HOLDINGS (KOSDAQ:035810).

We like the fact that EASY HOLDINGS made a profit of ₩9.78b on its revenue of ₩1.26t, in the last year. The chart below shows that both revenue and profit have declined over the last three years.

Check out our latest analysis for EASY HOLDINGS

Of course, it is only sensible to look beyond the statutory profits and question how well those numbers represent the sustainable earnings power of the business. This article will discuss how unusual items have impacted EASY HOLDINGS' most recent profit results. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

The Impact Of Unusual Items On Profit

To properly understand EASY HOLDINGS' profit results, we need to consider the ₩3.5b gain attributed to unusual items. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And that's as you'd expect, given these boosts are described as 'unusual'. If EASY HOLDINGS doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.

Our Take On EASY HOLDINGS' Profit Performance

We'd posit that EASY HOLDINGS' statutory earnings aren't a clean read on ongoing productivity, due to the large unusual item. Because of this, we think that it may be that EASY HOLDINGS' statutory profits are better than its underlying earnings power. Sadly, its EPS was down over the last twelve months. 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'd like to know more about EASY HOLDINGS as a business, it's important to be aware of any risks it's facing. For example, EASY HOLDINGS has 5 warning signs (and 1 which is significant) we think you should know about.

Today we've zoomed in on a single data point to better understand the nature of EASY HOLDINGS' 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. 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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