The subdued share price response suggests that Man and machining software SEs (ETR: MUM) Strong income did not offer any surprises. We think that investors have missed some encouraging factors that underlie the profit figures.
View our latest analysis for software for people and mechanically
As Finance Nerds would already know, the Construction ratio of cash flow is an important measure to assess how well the free cash flow (FCF) of a company corresponds to its profit. To get the build -up ratio, we first deduct FCF for a period of profit and then divide that number through the average operational assets for the period. The ratio shows us how much the profit of a company exceeds the FCF.
As a result, a negative surface -mounted ratio is positive for the company and a positive build -up ratio is negative. Although having a build -up ratio above zero is little worries, we think it is worth noting when a company has a relatively high build -up ratio. That is because some academic studies have suggested that high structure relationships tend to lead to lower profit or less profit growth.
Mensch und Maschin Software has a building ratio of -0.28 for the year until December 2024. This indicates that the free cash flow has considerably surpassed its legal profit. Namely, it produced a free cash flow of € 52 million during the period, which means that the reported profit of € 30.5 million dwarfed. The shareholders of software from Mensch and Maschine are undoubtedly pleased that the free cash flow has improved in the past twelve months.
As a result, you may be wondering what analysts predict in terms of future profitability. Fortunately, you can click here to see an interactive graph that reflects future profitability, based on their estimates.
Fortunately for shareholders, Mensch und Masin software produced a lot of free cash flow to support its legal profit figures. Based on this observation, we consider it possible for the legal profit of Mensch und Maschine Software to actually underestimate its profit potential! And the EPS has risen 43% annually over the past three years. The purpose of this article has been to assess how well we can rely on the legal income to display the potential of the company, but there is much more to consider. With this in mind we would not consider investing in a share, unless we had a thorough understanding of the risks. In terms of investment risks, We have identified 1 warning signal With Mensch und Maschine software and understanding this should be part of your investment process.
Today we zoomed in at a single data point to better understand the nature of the profit of Mensch und Maschine Software. But there is always more to discover if you are able to concentrate 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 seek shares that insiders buy. So maybe you want to see this free Collecting companies with a high efficiency on equity, or this list of shares with a high insider ownership.
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This article by Simply Wall St is generally in nature. We comment based on historical data and analyst forecasts that only use an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell shares and does not take your objectives or your financial situation into account. We strive to bring you in the long term -targeted analysis, powered by fundamental data. Note that our analysis may not take into account the latest price -sensitive company announcements or qualitative material. Simply Wall St has no position in the aforementioned stocks.
