Jiangsu Liance Electromechanical Technology Co., Ltd.'s (SHSE:688113) healthy profit numbers didn't contain any surprises for investors. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.
View our latest analysis for Jiangsu Liance Electromechanical Technology
![earnings-and-revenue-history](https://usnewsfile.futunn.com/pic/0-16436301-0-383fffe76a8eb470280f0e1a6662a422.png/big)
SHSE:688113 Earnings and Revenue History November 6th 2022
Zooming In On Jiangsu Liance Electromechanical Technology's 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). The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. This ratio tells us how much of a company's profit is not backed by free cashflow.
That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. 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. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".
Jiangsu Liance Electromechanical Technology has an accrual ratio of 0.38 for the year to September 2022. As a general rule, that bodes poorly for future profitability. And indeed, during the period the company didn't produce any free cash flow whatsoever. Over the last year it actually had negative free cash flow of CN¥37m, in contrast to the aforementioned profit of CN¥87.6m. We also note that Jiangsu Liance Electromechanical Technology's free cash flow was actually negative last year as well, so we could understand if shareholders were bothered by its outflow of CN¥37m.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Jiangsu Liance Electromechanical Technology.
Our Take On Jiangsu Liance Electromechanical Technology's Profit Performance
As we discussed above, we think Jiangsu Liance Electromechanical Technology's earnings were not supported by free cash flow, which might concern some investors. For this reason, we think that Jiangsu Liance Electromechanical Technology's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. Nonetheless, it's still worth noting that its earnings per share have grown at 32% over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you want to do dive deeper into Jiangsu Liance Electromechanical Technology, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Jiangsu Liance Electromechanical Technology and we think they deserve your attention.
Today we've zoomed in on a single data point to better understand the nature of Jiangsu Liance Electromechanical Technology's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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.
江蘇利安斯機電科技有限公司(上交所:688113)健康的利潤數據不會給投資者帶來任何意外。然而,法定利潤數字並不能説明全部情況,我們發現了一些可能引起股東關注的因素。
查看我們對江蘇利昂斯機電技術的最新分析
![earnings-and-revenue-history](https://usnewsfile.futunn.com/pic/0-16436301-0-383fffe76a8eb470280f0e1a6662a422.png/big)
上海證交所:688113收益和收入歷史2022年11月6日
放大江蘇萊昂斯機電科技公司的收益
在高端金融領域,衡量一家公司將報告利潤轉換為自由現金流(FCF)的程度的關鍵比率是應計比率(來自現金流)。應計制比率從給定期間的利潤中減去FCF,然後將結果除以該時間段內公司的平均運營資產。這個比率告訴我們,一家公司的利潤中有多少不是由自由現金流支持的。
這意味着負的應計比率是一件好事,因為它表明該公司帶來的自由現金流比其利潤所暗示的要多。這並不意味着我們應該擔心應計比率為正,但值得注意的是,在應計比率相當高的地方。引用勒維倫和雷蘇泰克2014年的一篇論文,“應計利潤較高的公司未來的利潤往往較低”。
江蘇利昂斯機電科技截至2022年9月的年度應計比率為0.38。一般來説,這對未來的盈利能力來説是個不好的預兆。事實上,在此期間,該公司沒有產生任何自由現金流。在過去的一年裏,它實際上負面自由現金流為3700萬元,而前述利潤為8760萬元。我們還注意到,江蘇連斯機電科技去年的自由現金流實際上也是負的,因此我們可以理解股東是否因其3700萬元的資金外流而感到困擾。
注:我們總是建議投資者檢查資產負債表的實力。點擊此處查看我們對江蘇利昂斯機電科技的資產負債表分析。
我們對江蘇聯思機電科技盈利業績的看法
如上所述,我們認為江蘇利昂斯機電科技的收益不是由自由現金流支撐的,這可能會讓一些投資者感到擔憂。因此,我們認為江蘇利昂斯機電科技有限公司的法定利潤可能是其潛在盈利能力的不良指引,並可能給投資者帶來對該公司過於樂觀的印象。儘管如此,值得注意的是,它的每股收益在過去三年裏以32%的速度增長。當然,當談到分析其收益時,我們只是觸及了皮毛;人們還可以考慮利潤率、預測增長和投資回報等因素。如果你真的想更深入地研究江蘇利昂斯機電科技,你還可以看看它目前面臨的風險。在Simply Wall St.,我們發現1江蘇利昂斯機電技術警示標誌我們認為他們值得你的關注。
今天,我們放大了一個數據點,以更好地瞭解江蘇利昂斯機電科技公司的利潤性質。但還有很多其他方式可以讓你瞭解一家公司的看法。一些人認為,高股本回報率是高質量企業的良好標誌。雖然這可能需要為您做一些研究,但您可能會發現免費擁有高股本回報率的公司的集合,或者是內部人士購買的有用的股票清單。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。