Examining Carborundum Universal Limited's (NSE:CARBORUNIV) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CARBORUNIV's latest performance announced on 31 March 2019 and weight these figures against its longer term trend and industry movements.

View our latest analysis for Carborundum Universal

Could CARBORUNIV beat the long-term trend and outperform its industry?

CARBORUNIV's trailing twelve-month earnings (from 31 March 2019) of ₹2.5b has jumped 15% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 20%, indicating the rate at which CARBORUNIV is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and if the whole industry is experiencing the hit as well.

In terms of returns from investment, Carborundum Universal has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 11% exceeds the IN Machinery industry of 7.2%, indicating Carborundum Universal has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Carborundum Universal’s debt level, has increased over the past 3 years from 16% to 18%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 39% to 5.4% over the past 5 years.

What does this mean?

Though Carborundum Universal's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Carborundum Universal gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Carborundum Universal to get a better picture of the stock by looking at:

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

2. Financial Health: Are CARBORUNIV’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.