Zhejiang Yuejian Intelligent Equipment Co.,Ltd.'s (SHSE:603095) earnings announcement last week didn't impress shareholders. Despite the soft profit numbers, our analysis has optimistic about the overall quality of the income statement.
The Impact Of Unusual Items On Profit
To properly understand Zhejiang Yuejian Intelligent EquipmentLtd's profit results, we need to consider the CN¥14m expense attributed to unusual items. 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. Zhejiang Yuejian Intelligent EquipmentLtd took a rather significant hit from unusual items in the year to December 2023. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Zhejiang Yuejian Intelligent EquipmentLtd.
Our Take On Zhejiang Yuejian Intelligent EquipmentLtd's Profit Performance
As we mentioned previously, the Zhejiang Yuejian Intelligent EquipmentLtd's profit was hampered by unusual items in the last year. Because of this, we think Zhejiang Yuejian Intelligent EquipmentLtd's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! 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. Our analysis shows 3 warning signs for Zhejiang Yuejian Intelligent EquipmentLtd (1 shouldn't be ignored!) and we strongly recommend you look at these bad boys before investing.
Today we've zoomed in on a single data point to better understand the nature of Zhejiang Yuejian Intelligent EquipmentLtd'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 that insiders are buying.
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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.