Analyzing Japfa Ltd.'s (SGX:UD2) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess UD2's recent performance announced on 31 December 2019 and compare these figures to its long-term trend and industry movements.

Check out our latest analysis for Japfa

Commentary On UD2's Past Performance

UD2's trailing twelve-month earnings (from 31 December 2019) of US$120m has jumped 19% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which UD2 is growing has accelerated. What's enabled this growth? Let's take a look at if it is solely because of industry tailwinds, or if Japfa has seen some company-specific growth.

In terms of returns from investment, Japfa has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 6.8% exceeds the SG Food industry of 4.2%, indicating Japfa has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Japfa’s debt level, has declined over the past 3 years from 17% to 15%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 100% to 107% over the past 5 years.

What does this mean?

Japfa's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Japfa gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Japfa to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for UD2’s future growth? Take a look at our free research report of analyst consensus for UD2’s outlook.

2. Financial Health: Are UD2’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 December 2019. This may not be consistent with full year annual report figures.

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.

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