$Information Services Group (III.US)$There has been little c...

Net profit, on the other hand, declined sharply in 2019 and 2020 to almost zero, and soared in 2021. The average growth rate in the past 4 years was 28.6%, and the increase was 27% in 2022.

The income statement shows that interest expenses account for 10% of operating profit. The burden is moderate. There are few other income items, and the cost flexibility is relatively small. As a result, profit amplifies fluctuations in revenue, and small fluctuations in revenue can cause large fluctuations in profit.

The balance ratio has declined from 63.3% to 58.7% in the past 5 years, and accounts receivable account for a relatively high share. In 2022, it reached 80 million yuan, which is 4 times net profit, accounting for 28% of revenue, which is slightly higher than normal.

Goodwill and intangible assets are 110 million, higher than 100 million net assets, and the asset content is very low.

The long-term loan is 74.416 million. Considering the amount of net assets, the leverage ratio is not low.

Net cash flow has been much higher than net investment over the past five years, and shareholders' surpluses are high, but financing cash flow has always been a net outflow.

Looking closely, the “net cash flow from common stock payments” is far higher than the growth rate of treasury stocks. Strangely enough, I also looked closely at the cash flow statement and found that every year, hundreds of thousands of “cash received by employees exercising stock options” indicates that treasury stocks bought at market prices should be sent out again in the form of rights redeemed. This is a very hidden expense. No wonder that shareholders' surpluses have never increased.

The current price-earnings ratio is 12.9, which is not very attractive considering hidden expenses.