5214 · Nippon Electric Glass

Will it survive?

• Can it pay its interest? 24.9×
  Comfortable
  Operating income ¥34.1B ÷ interest expense ¥1.4B
  What this means

  Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.

• How heavy is the debt, net of cash? +¥22.9B
  Net cash
  Cash ¥120.3B − debt ¥97.4B
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥22.9B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

• How long is cash tied up? 90d
  Long (60+ days)
  DSO 72 + DIO 79 − DPO 61 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

• Return on invested capital 3%
  Below average through the cycle
  10-yr median, range -2%–7%; 7% latest = NOPAT ¥27.0B ÷ invested capital ¥393.5B
  Industry peers: median 9%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 7% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin —
  Not enough data
  Industry peers: median 6%
  What this means

  The filing data didn't include the inputs for this check.

• Are earnings backed by cash? 1.76×
  Cash-backed
  Cash from ops ¥52.0B ÷ net income ¥29.6B
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

• Investing or harvesting? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 8 of 10
  What this means

  Lost money in 2 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 0 of 10 yrs
  What this means

  A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

• Operating margin 9% → 3% (3-yr avg ends)
  What this means

  The recent-years average (3%) sits below the early years (9%), but the latest year (11%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is 8% — read it across the cycle, not on the dip.

• Reinvestment, incremental ROIC returns capital
  What this means

  The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.

• Worst year 2023 · −3.7% op. margin
  What this means

  Operations went underwater in 2023, understand why before trusting the good years.

• Dividend record rising
  What this means

  Paid and raised the dividend across the record, the continuity Graham prized.