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For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Dollar Industries Limited (NSE:DOLLAR) useful as an attempt to give more color around how Dollar Industries is currently performing.

See our latest analysis for Dollar Industries

How DOLLAR fared against its long-term earnings performance and its industry

DOLLAR's trailing twelve-month earnings (from 31 March 2019) of ₹736m has jumped 16% 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 39%, indicating the rate at which DOLLAR is growing has slowed down. To understand what's happening, let's examine what's transpiring with margins and whether the rest of the industry is feeling the heat.

In terms of returns from investment, Dollar Industries has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 11% exceeds the IN Luxury industry of 6.2%, indicating Dollar Industries has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Dollar Industries’s debt level, has increased over the past 3 years from 25% to 30%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 149% to 51% over the past 5 years.

What does this mean?

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

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

2. Financial Health: Are DOLLAR’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.