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Investors with a long-term horizong may find it valuable to assess Liberty Shoes Limited's (NSE:LIBERTSHOE) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Liberty Shoes is currently performing.
Check out our latest analysis for Liberty Shoes
Commentary On LIBERTSHOE's Past Performance
LIBERTSHOE's trailing twelve-month earnings (from 31 March 2019) of ₹68m has increased by 3.7% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -18%, indicating the rate at which LIBERTSHOE is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is only owing to industry tailwinds, or if Liberty Shoes has seen some company-specific growth.
In terms of returns from investment, Liberty Shoes has fallen short of achieving a 20% return on equity (ROE), recording 3.9% instead. Furthermore, its return on assets (ROA) of 5.2% is below the IN Luxury industry of 6.3%, indicating Liberty Shoes's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Liberty Shoes’s debt level, has declined over the past 3 years from 17% to 14%.
What does this mean?
Though Liberty Shoes's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn't always indicative of a continued optimistic outlook. There may be factors that are affecting the entire industry thus the high industry growth rate over the same period of time. I suggest you continue to research Liberty Shoes to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for LIBERTSHOE’s future growth? Take a look at our free research report of analyst consensus for LIBERTSHOE’s outlook.
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Financial Health: Are LIBERTSHOE’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.
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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.