Have financial data playing a role?

The builders of Southern Score, Berhad (Klse: SSB8), has increased a great share in the stock market last week by 8.8%. In view of the fact that the stock prices are usually geared towards the financial performance of a company in the long term, we have decided to investigate its financial indicators more closely to determine whether they have one hand in the latest revival to play them. In particular, we decided to study the builders of Southern Score Berhad in this article.

Equity or ROE is an important factor that is taken into account by a shareholder, since it reports how effectively your capital is reinvested. In other words, it is a profitability rate that measures the return of the company's capital.

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Equity return can be calculated by using the formula:

Equity return = net profit (from continued operations) ÷ shareholders equity

Based on the above formula, the Roe for Southern Score Builder Berhad is:

22% = RM39M ÷ RM176M (based on the follow -up twelve months to December 2024).

The “return” is the amount that will be earned in the past twelve months after taxes. One way to conceive this is that the company has made a myr1 Myr1 Myr0.22 profit for every Myr1 of the cash capital.

See our latest analysis for Southern Score Builder Berhad

So far we have learned that Roe is a measure of the profitability of a company. Based on how much of its profits the company reinvested or “kept”, we can evaluate the future ability of a company to achieve profits. Assuming that everything else remains unchanged, the higher the ROE and the bond of profit, the higher the growth rate of a company compared to undertaking that does not necessarily bear these characteristics.

First, Southern Score Builder Berhads Roe looks acceptable. Compared to an average industries of 8.5%, the company's ROE looks quite remarkable. This was probably the ground for the builders of Southern Score in Berhad in the past five years.

Afterwards we carried out a comparison between the builders of Southern Score in Berhad with the industry, which showed that the company's growth in the same 5-year period is similar to the average industry growth of 17%.

Profit growth is a big factor in stock assessment. It is important for an investor to know whether the market has a prize in the expected profit growth (or the decline) of the company. This will then help you to determine whether the stock is placed for a light or dark future. A good indicator of the expected profit growth is the P/E ratio, which determines that the price that the market for a share pays based on its profit prospects. You may want to check whether the builders of Southern Score Berhad deal with a high p/e or a low k/e in relation to his industry.