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Measuring mm2 Asia Ltd.'s (SGX:1B0) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 1B0's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.

View our latest analysis for mm2 Asia

Did 1B0 perform worse than its track record and industry?

1B0's trailing twelve-month earnings (from 31 March 2019) of S$19m has declined by -15% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 35%, indicating the rate at which 1B0 is growing has slowed down. Why is this? Let's examine what's occurring with margins and whether the rest of the industry is feeling the heat.

In terms of returns from investment, mm2 Asia has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 5.3% exceeds the SG Entertainment industry of 4.8%, indicating mm2 Asia has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for mm2 Asia’s debt level, has declined over the past 3 years from 26% to 12%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 30% to 84% over the past 5 years.

What does this mean?

mm2 Asia's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. You should continue to research mm2 Asia to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 1B0’s future growth? Take a look at our free research report of analyst consensus for 1B0’s outlook.

2. Financial Health: Are 1B0’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.