6506 · Yaskawa Electric

Will it survive?

• Can it pay its interest? 29.8×
  Comfortable
  Operating income ¥47.3B ÷ interest expense ¥1.6B
  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? ¥63.6B · 1.3× operating profit
  Modest net debt
  Cash ¥61.2B − debt ¥124.9B
  What this means

  Netting ¥61.2B of cash and short-term investments against ¥124.9B of debt leaves ¥63.6B owed, about 1.3× a year's operating profit (2.6× 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 12%
  Solid through the cycle
  10-yr median, range 7%–20%; 7% latest = NOPAT ¥37.4B ÷ invested capital ¥547.2B
  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 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 6%
  Solid through the cycle
  10-yr median margin, range -3%–8%; latest ¥35.8B = operating cash ¥52.2B − maintenance capex ¥16.3B
  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 7% of revenue this year, a 6% median across 10 years. It chose to put ¥29.9B more into growth, so free cash flow this year was ¥5.9B — the gap is investment, not weakness.

• Are earnings backed by cash? 1.48×
  Cash-backed
  Cash from ops ¥52.2B ÷ net income ¥35.2B
  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? 49%
  Returns about half
  Dividends + buybacks ¥17.7B ÷ Owner Earnings ¥35.8B
  What this means

  Of ¥35.8B Owner Earnings, ¥17.7B (49%) went back to shareholders, ¥17.7B dividends, ¥2M buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

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

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

Durability & moat, 2017–2026

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% 3 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 10% → 10% (3-yr avg ends)
  What this means

  Through the cycle the operating margin held roughly steady — about 10% early, 10% lately, median 9%.

• Reinvestment, incremental ROIC 3%
  What this means

  Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.

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

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

• Worst year 2020 · 5.9% op. margin
  What this means

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

• Share count +0.0%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.

• Dividend record rising
  What this means

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