EFT Solutions Holdings Limited's (HKG:8062) earnings announcement last week didn't impress shareholders. However, our analysis suggests that the soft headline numbers are getting counterbalanced by some positive underlying factors.
View our latest analysis for EFT Solutions Holdings
SEHK:8062 Earnings and Revenue History November 18th 2022
Examining Cashflow Against EFT Solutions Holdings' Earnings
In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF.
Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
EFT Solutions Holdings has an accrual ratio of -0.19 for the year to September 2022. Therefore, its statutory earnings were very significantly less than its free cashflow. Indeed, in the last twelve months it reported free cash flow of HK$25m, well over the HK$12.3m it reported in profit. EFT Solutions Holdings' free cash flow improved over the last year, which is generally good to see.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of EFT Solutions Holdings.
Our Take On EFT Solutions Holdings' Profit Performance
As we discussed above, EFT Solutions Holdings' accrual ratio indicates strong conversion of profit to free cash flow, which is a positive for the company. Based on this observation, we consider it possible that EFT Solutions Holdings' statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 4 warning signs for EFT Solutions Holdings you should be mindful of and 1 of them is significant.
Today we've zoomed in on a single data point to better understand the nature of EFT Solutions 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. 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. 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.
電匯方案控股有限公司 (HKG: 8062) 上星期盈利公告並沒有給股東留下深刻印象。但是,我們的分析表明,軟標題數字被一些積極的潛在因素平衡。
查看我們對 EFT 解決方案控股的最新分析
聯交所代碼:8062 年十一月十八日收益及收入歷史記錄
檢查 EFT 解決方案控股盈利的現金流
在高融資中,用於衡量公司將報告的利潤轉換為自由現金流(FCF)的關鍵比率是 應計比率 (來自現金流量)。簡單的英文,這個比率從淨利潤中減去 FCF,並將該數字除以該期間公司的平均運營資產。該比率向我們展示了一家公司的利潤超過其 FCF 的程度。
因此,它實際上被認為是一件好事,當一個公司有一個負的應計比率,但是如果它的應計比率是正的一件壞事。這並不意味著我們應該擔心積極的應計比率,但值得注意的是,應計比率相當高。值得注意的是,有一些學術證據表明,一般來說,高應計比率對於短期利潤來說是一個不好的跡象。
截至 2022 年 9 月,EFT 解決方案控股的應計比率為 -0.19。因此,其法定收益遠低於其自由現金流。事實上,在過去十二個月,該公司錄得的自由現金流為 2.5 百萬港元,遠遠高於盈利報告的 123 萬港元。EFT 解決方案控股的自由現金流比去年有所改善,這通常很高興看到。
注意: 我們始終建議投資者檢查資產負債表強度。點擊此處查看我們對 EFT 解決方案控股的資產負債表分析。
我們對 EFT 解決方案控股的利潤表現的看法
正如我們上面討論的,EFT Solutions 控股的應計比率表明利潤轉化為自由現金流的強勁,這對公司來說是一個積極的。根據此觀察,我們認為 EFT 解決方案控股公司的法定利潤實際上低估了其盈利潛力!不幸的是,其每股盈利實際上在去年下跌。本文的目標是評估我們可以如何依靠法定收益來反映公司的潛力,但還有很多要考慮的事情。因此,如果您想更深入地研究該股票,則至關重要的是要考慮其面臨的任何風險。例子點:我們已經發現 EFT 解決方案控股的 4 個警告標誌 你應該注意,其中 1 是重要的。
今天,我們已經放大了一個數據點,以更好地了解 EFT 解決方案控股的利潤性質。但總是有更多的發現,如果你有能力把你的思想集中在分鐘.例如,許多人認為股權回報率高,作為有利的商業經濟學的指示,而其他人則喜歡「跟隨錢」並搜索內部人士正在購買的股票。雖然可能需要代表您進行一些研究,但您可能會發現這一點 自由 集合擁有高股權回報率的公司,或者內部人士正在購買的股票這個名單是有用的。
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這篇文章由簡單牆聖是一般性質. 我們僅使用公正的方法,根據歷史數據和分析師預測提供評論,我們的文章並不打算作為財務建議。 它並不構成購買或出售任何股票的建議,也不會考慮您的目標或您的財務狀況。我們的目標是為您帶來由基本數據驅動的長期集中分析。請注意,我們的分析可能不會考慮最新的價格敏感公司公告或定性材料。簡易華街在提及的任何股票中都沒有倉位。