6361 · Ebara

Will it survive?

• Can it pay its interest? 16.8×
  Comfortable
  Operating income ¥113.8B ÷ interest expense ¥6.8B
  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? ¥68.8B · 0.6× operating profit
  Modest net debt
  Cash ¥143.5B − debt ¥212.3B
  What this means

  Netting ¥143.5B of cash and short-term investments against ¥212.3B of debt leaves ¥68.8B owed, about 0.6× a year's operating profit (1.9× on the gross debt, before the cash). 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? —
  Not enough data
  What this means

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

Is it a good business?

• Return on invested capital 11%
  Solid through the cycle
  10-yr median, range 5%–19%; 16% latest = NOPAT ¥89.9B ÷ invested capital ¥577.7B
  Industry peers: median 8%
  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 16% 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 6%
  Solid through the cycle
  6-yr median margin, range 1%–9%; latest ¥6.0B = operating cash ¥40.8B − maintenance capex ¥34.8B
  Industry peers: median 7%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 1% of revenue this year, a 6% median across 6 years. It chose to put ¥57.4B more into growth, so free cash flow this year was (¥51.5B) — the gap is investment, not weakness.

• Are earnings backed by cash? 0.53×
  Thinly cash-backed
  Cash from ops ¥40.8B ÷ net income ¥76.6B
  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? 803%
  Returned more than it generated
  Dividends + buybacks ¥47.8B ÷ Owner Earnings ¥6.0B
  What this means

  The company returned more than it generated: against ¥6.0B of Owner Earnings, ¥47.8B (803%) went back to shareholders, ¥27.7B dividends, ¥20.1B buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.

• Investing or harvesting? 2.65×
  Expanding
  Capex ¥92.2B ÷ depreciation ¥34.8B
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Durability & moat, 2016–2025

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

• Profitable years 10 of 10
  What this means

  Never lost money over the record, the earnings stability Graham insisted on.

• Return on capital ≥ 15% 5 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 6% → 12% (3-yr avg ends)
  What this means

  Through the cycle the operating margin widened — about 6% early to 12% lately, median 7% — pricing power intact or improving.

• Reinvestment, incremental ROIC 29%
  What this means

  Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.

• Owner earnings growth −4%/yr
  What this means

  Owner earnings shrank about 4% a year over the record.

• Worst year 2017 · 4.7% op. margin
  What this means

  Stayed profitable even in its hardest year, the resilience that survives recessions.

• Share count −1.1%/yr
  What this means

  The share count is shrinking, buybacks are quietly growing your slice of the business.

• Dividend record rising
  What this means

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