We Like ZEAL Network's (ETR:TIMA) Earnings For More Than Just Statutory Profit

editorial-team@simplywallst.com (Simply Wall St)

Wed, May 14, 2025, 9:17 PM 3 min read

ZEAL Network SE's (ETR:TIMA) caller net study didn't connection immoderate surprises, with the shares unchanged implicit the past week. We did immoderate investigation to find retired wherefore and judge that investors mightiness beryllium missing immoderate encouraging factors contained successful the earnings.

Our escaped banal study includes 1 informing motion investors should beryllium alert of earlier investing successful ZEAL Network. Read for escaped now.

Many investors haven't heard of the accrual ratio from cashflow, but it is really a utile measurement of however good a company's nett is backed up by escaped currency travel (FCF) during a fixed period. To get the accrual ratio we archetypal subtract FCF from nett for a period, and past disagreement that fig by the mean operating assets for the period. The ratio shows america however overmuch a company's nett exceeds its FCF.

Therefore, it's really considered a bully happening erstwhile a institution has a antagonistic accrual ratio, but a atrocious happening if its accrual ratio is positive. While having an accrual ratio supra zero is of small concern, we bash deliberation it's worthy noting erstwhile a institution has a comparatively precocious accrual ratio. To punctuation a 2014 insubstantial by Lewellen and Resutek, "firms with higher accruals thin to beryllium little profitable successful the future".

Over the 12 months to March 2025, ZEAL Network recorded an accrual ratio of -0.12. That indicates that its escaped currency travel was a just spot much than its statutory profit. To wit, it produced escaped currency travel of €77m during the period, dwarfing its reported nett of €47.1m. ZEAL Network shareholders are nary uncertainty pleased that escaped currency travel improved implicit the past 12 months.

That mightiness permission you wondering what analysts are forecasting successful presumption of aboriginal profitability. Luckily, you tin click present to spot an interactive graph depicting aboriginal profitability, based connected their estimates.

As we discussed above, ZEAL Network has perfectly satisfactory escaped currency travel comparative to profit. Based connected this observation, we see it apt that ZEAL Network's statutory nett really understates its net potential! And connected apical of that, its net per stock person grown astatine an highly awesome complaint implicit the past 3 years. The extremity of this nonfiction has been to measure however good we tin trust connected the statutory net to bespeak the company's potential, but determination is plentifulness much to consider. If you privation to bash dive deeper into ZEAL Network, you'd besides look into what risks it is presently facing. While conducting our analysis, we recovered that ZEAL Network has 1 informing sign and it would beryllium unwise to disregard it.