Are Qatar Industrial Manufacturing Company Q.P.S.C's (DSM:QIMD) Statutory Earnings A Good Guide To Its Underlying Profitability?

Broadly speaking, profitable businesses are less risky than 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 Qatar Industrial Manufacturing Company Q.P.S.C (DSM:QIMD).

While Qatar Industrial Manufacturing Company Q.P.S.C was able to generate revenue of ر.ق347.8m in the last twelve months, we think its profit result of ر.ق79.9m was more important. Below, you can see that both its revenue and its profit have fallen over the last three years.

See our latest analysis for Qatar Industrial Manufacturing Company Q.P.S.C

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. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Qatar Industrial Manufacturing Company Q.P.S.C.

Our Take On Qatar Industrial Manufacturing Company Q.P.S.C's Profit Performance

Because of this, we think that it may be that Qatar Industrial Manufacturing Company Q.P.S.C's statutory profits are better than its underlying earnings power. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've found that Qatar Industrial Manufacturing Company Q.P.S.C has 4 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

In this article we've looked at a number of factors that can impair the utility of profit numbers, as a guide to a business. But there are plenty of other ways to inform your opinion of a company. 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. 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 that insiders are buying to be useful.

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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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