Weak Statutory Earnings May Not Tell The Whole Story For Dongwoo Farm To Table Co (KOSDAQ:088910)

The subdued market reaction suggests that Dongwoo Farm To Table Co ., Ltd's (KOSDAQ:088910) recent earnings didn't contain any surprises. Our analysis suggests that along with soft profit numbers, investors should be aware of some other underlying weaknesses in the numbers.

View our latest analysis for Dongwoo Farm To Table Co

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Dongwoo Farm To Table Co's profit received a boost of ₩10b in unusual items, over the last year. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Dongwoo Farm To Table Co had a rather significant contribution from unusual items relative to its profit to September 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Dongwoo Farm To Table Co.

Our Take On Dongwoo Farm To Table Co's Profit Performance

As we discussed above, we think the significant positive unusual item makes Dongwoo Farm To Table Co's earnings a poor guide to its underlying profitability. As a result, we think it may well be the case that Dongwoo Farm To Table Co's underlying earnings power is lower than its statutory profit. Sadly, its EPS was down over the last twelve months. 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, we've discovered 4 warning signs that you should run your eye over to get a better picture of Dongwoo Farm To Table Co.

This note has only looked at a single factor that sheds light on the nature of Dongwoo Farm To Table Co's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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 with high insider ownership.

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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.