Owner Scorecard
An independent research publication · data as of July 9, 2026

← Japan catalog ← 6861 Manual 6920 → ← 6473 Auto Components ADNT →

6902 · Denso

Auto parts Capital-intensive IFRS
Latest filing: FY2026 annual securities report (有価証券報告書) · EDINET

The numbers below are read directly from Denso’s EDINET filing, in yen. The Japanese-language narrative is not machine-read; the short business note that follows is written and reviewed by hand, grounded in the filing and the company’s established facts. Find it on EDINET (code 6902) →

The business in brief

What it is
Denso is one of the world's largest makers of automotive components and systems — the parts that go inside a car rather than the car itself. It sells mainly to vehicle manufacturers, who design those parts into their models, and it has long been closely tied to the Toyota group. Its money comes from supplying these components in volume across the global auto industry.
What moves the needle
The question that governs a parts supplier is whether it sells a franchise or a commodity, and the answer turns on who holds the power in the room: a handful of large automakers buy most of what gets made, and a maker tied closely to one customer group lives partly at that customer's table. Watch for pricing power — does the gross margin hold when the buyer asks for its annual price cut — and watch the cost position, since a low-cost producer can earn a fair return on a part anyone could bid for while a high-cost one cannot. The reinvestment burden is the other lever: keeping a parts line abreast of shifts in vehicle technology demands steady spending, and the test is whether that capital earns its keep or merely buys a seat for the next round of bidding. The bad case is the ordinary fate of a supplier — heavy investment, modest and squeezable returns, and little say over its own price; the figures for margins, returns and the balance sheet are in the record below.

Written and reviewed by hand, grounded in the filing and the company’s established facts.

Where the money comes from

on EDINET →

The biggest segment, Japan, is also where the profit is made: 41% of revenue and 35% of segment operating profit.

Revenue by reportable segment, FY2026
Operating profit same segments
  • Japan41%¥3.09T35% of profit
  • North America27%¥2.01T25% of profit
  • Asia22%¥1.62T34% of profit
  • Europe9%¥691.5B5% of profit

From the segment footnote of the company's own annual securities report. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

I

The record

What the business has done across the cycle, read straight from the EDINET filing: the multi-year record, and the walk from reported profit to the cash an owner could take out.

The record, 2017–2026

realized figures from each filing · older years to the left
2017’172018’182019’192020’202021’212022’222023’232024’242025’252026’26
Income statement
¥4.53T¥5.11T¥5.36T¥5.15T¥4.94T¥5.52T¥6.40T¥7.14T¥7.16T¥7.54TRevenueRevenue
———14%13%———15%16%Gross marginGross mgn
———13%10%———8%8%SG&A / revenueSG&A/rev
¥49.6B¥412.7B¥316.2B¥61.1B¥155.1B¥341.2B¥426.1B¥380.6B¥519.0B¥552.5BOperating incomeOp. inc.
1.1%8.1%5.9%1.2%3.1%6.2%6.7%5.3%7.2%7.3%Operating marginOp. mgn
¥257.6B¥320.6B¥254.5B¥68.1B¥125.1B¥263.9B¥314.6B¥312.8B¥419.1B¥443.8BNet incomeNet inc.
Cash flow & returns
¥467.8B¥558.0B¥533.5B¥595.3B¥437.2B¥395.6B¥602.7B¥961.8B¥758.7B¥511.0BOperating cash flowOp. cash
¥210.2B¥237.4B¥279.0B¥527.2B¥312.2B¥131.7B¥288.1B¥649.0B¥339.7B¥67.3BWorking capital & otherWC & other
—¥348.0B¥410.2B¥424.5B¥395.5B¥336.4B¥360.6B¥391.6B¥380.1B¥370.2BCapexCapex
—6.8%7.6%8.2%8.0%6.1%5.6%5.5%5.3%4.9%Capex / revenueCapex/rev
—¥210.0B¥123.2B¥170.8B¥41.7B¥59.2B¥242.1B¥570.2B¥378.7B¥140.9BOwner earningsOwner earn.
—4.1%2.3%3.3%0.8%1.1%3.8%8.0%5.3%1.9%Owner earnings marginOE mgn
—¥210.0B¥123.2B¥170.8B¥41.7B¥59.2B¥242.1B¥570.2B¥378.7B¥140.9BFree cash flowFCF
—4.1%2.3%3.3%0.8%1.1%3.8%8.0%5.3%1.9%Free cash flow marginFCF mgn
¥95.0B¥97.8B¥105.3B¥108.5B¥108.5B¥115.9B¥132.8B¥146.0B¥180.5B¥176.7BDividends paidDiv. paid
¥30.0B¥26.5B¥28.4B¥13M¥15M¥97.5B¥100.0B¥200.0B¥196.6B¥253.4BBuybacksBuybacks
1%10%7%1%3%6%7%5%9%9%ROICROIC
8%9%7%2%3%6%7%6%8%8%Return on equityROE
5%6%4%−1%0%3%4%3%5%5%Retained to equityRetained/eq
Balance sheet
¥467.6B¥783.3B¥711.6B¥597.8B¥912.4B¥867.8B¥733.9B¥789.4B¥986.5B¥1.19TCash & investmentsCash+inv
¥359.1B¥993.5B¥1.01T¥885.5B¥1.03T¥1.12T¥1.26T¥1.28T¥1.24T¥1.41TReceivablesReceiv.
—¥923.3B¥939.5B¥891.9B¥1.01T¥1.13T¥1.22T¥1.23T¥1.27T¥1.29TAccounts payablePayables
¥359.1B¥70.3B¥69.5B(¥6.5B)¥14.4B(¥10.6B)¥44.5B¥48.8B(¥31.9B)¥119.5BOperating working capitalOper. WC
¥1.41T¥2.56T¥2.61T¥2.35T¥2.79T¥3.17T¥3.28T¥3.87T¥3.91T¥4.14TCurrent assetsCur. assets
¥786.2B¥858.9B¥793.0B¥1.01T¥1.02T¥1.04T¥1.12T¥1.41T¥1.44T¥1.23TCurrent liabilitiesCur. liab.
1.8×3.0×3.3×2.3×2.7×3.1×2.9×2.7×2.7×3.4×Current ratioCurr. ratio
—¥11.2B¥14.2B¥13.8B¥21.1B¥24.0B¥23.2B¥28.8B¥29.6B¥68.3BGoodwillGoodwill
¥5.15T¥5.76T¥5.79T¥5.65T¥6.77T¥7.43T¥7.41T¥9.09T¥8.13T¥8.73TTotal assetsAssets
¥202.0B¥473.9B¥550.2B¥465.4B¥854.2B¥991.4B¥889.3B¥850.7B¥699.4B¥811.3BTotal debtDebt
(¥265.6B)(¥309.5B)(¥161.4B)(¥132.4B)(¥58.2B)¥123.6B¥155.4B¥61.3B(¥287.1B)(¥377.8B)Net debt / (cash)Net debt
136.2×43.5×26.3×6.3×21.2×40.6×31.2×17.1×20.1×17.4×Interest coverageInt. cov.
¥3.31T¥3.60T¥3.60T¥3.40T¥3.89T¥4.30T¥4.38T¥5.53T¥4.98T¥5.49TShareholders’ equityEquity
Per share
3.18B3.18B3.15B3.15B3.15B3.15B3.15B3.15B2.91B2.91BShares out (diluted)Shares
¥1425.30¥1608.26¥1701.51¥1635.10¥1566.33¥1749.97¥2031.02¥2266.89¥2460.26¥2590.18Revenue / shareRev/sh
¥81.11¥100.92¥80.76¥21.61¥39.68¥83.73¥99.83¥99.24¥143.97¥152.44EPS (diluted)EPS
—¥66.12¥39.10¥54.19¥13.23¥18.79¥76.83¥180.91¥130.08¥48.39Owner earnings / shareOE/sh
—¥66.12¥39.10¥54.19¥13.23¥18.79¥76.83¥180.91¥130.08¥48.39Free cash flow / shareFCF/sh
¥29.91¥30.80¥33.42¥34.42¥34.42¥36.76¥42.13¥46.33¥62.00¥60.70Dividends / shareDiv/sh
—¥109.55¥130.16¥134.69¥125.50¥106.74¥114.40¥124.26¥130.56¥127.16Cap. spending / shareCapex/sh
¥1042.96¥1132.87¥1140.85¥1077.85¥1234.54¥1364.10¥1388.72¥1756.15¥1710.17¥1886.89Book value / shareBVPS

Share counts before 2024 are restated ×4 for a stock split, so per-share figures sit on one basis.

Per-share growththe realized rate an owner's share compounded
9-yr5-yr
Revenue / share+6.9%/yr+10.6%/yr
Owner earnings / share−3.8%/yr (8-yr)+29.6%/yr
EPS+7.3%/yr+30.9%/yr
Dividends / share+8.2%/yr+12.0%/yr
Capital spending / share+1.9%/yr (8-yr)+0.3%/yr
Book value / share+6.8%/yr+8.9%/yr

Owner-earnings bridge

FY2022–FY2026cash-flow statement, EDINET →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business reported ¥443.8B of profit but ¥140.9B of owner earnings: ¥302.9B less than the profit line, taken out by capital spending and the timing of cash.

Reported net income¥443.8B
Owner earnings¥140.9B · 2% of revenue
FY2026FY2025FY2024FY2023FY2022
Reported net income¥443.8B¥419.1B¥312.8B¥314.6B¥263.9B
Working capital & othertiming of cash in and out, other non-cash items+¥67.3B+¥339.7B+¥649.0B+¥288.1B+¥131.7B
Cash from operations¥511.0B¥758.7B¥961.8B¥602.7B¥395.6B
Capital expenditurecash put back in to keep running and to grow−¥370.2B−¥380.1B−¥391.6B−¥360.6B−¥336.4B
Owner earnings¥140.9B¥378.7B¥570.2B¥242.1B¥59.2B
Owner-earnings marginowner earnings ÷ revenue2%5%8%4%1%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

II

Quality & stewardship

Returns, the balance sheet, and stewardship. The same checks the US pages run, in yen.

Owner’s Scorecard

FY2026 Annual securities report · source on EDINET →

Will it survive?

  • Can it pay its interest? 17.4×
    Comfortable
    Operating income ¥552.5B ÷ interest expense ¥31.7B
    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? +¥377.8B
    Net cash
    Cash ¥1.19T − debt ¥811.3B
    What this means

    Cash and short-term investments exceed every dollar of debt by ¥377.8B, 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? —
    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 6%
    Below average through the cycle
    10-yr median, range 1%–10%; 9% latest = NOPAT ¥436.5B ÷ invested capital ¥5.11T
    Industry peers: median 16%
    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 9% 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 3%
    Thin through the cycle
    9-yr median margin, range 1%–8%; latest ¥140.9B = operating cash ¥511.0B − maintenance capex ¥370.2B
    Industry peers: median 2%
    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 2% of revenue this year, a 3% median across 9 years.

  • Are earnings backed by cash? 1.15×
    Cash-backed
    Cash from ops ¥511.0B ÷ net income ¥443.8B
    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? 305%
    Returned more than it generated
    Dividends + buybacks ¥430.1B ÷ Owner Earnings ¥140.9B
    What this means

    The company returned more than it generated: against ¥140.9B of Owner Earnings, ¥430.1B (305%) went back to shareholders, ¥176.7B dividends, ¥253.4B 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? —
    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% 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 5% → 7% (3-yr avg ends)
    What this means

    Through the cycle the operating margin widened — about 5% early to 7% lately, median 6% — pricing power intact or improving.

  • Reinvestment, incremental ROIC 9%
    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 +6%/yr
    What this means

    Owner earnings grew about 6% a year over the record.

  • Worst year 2017 · 1.1% op. margin
    What this means

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

  • Dividend record rising
    What this means

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

All figures as filed; the source filing is linked above.

How the cash was used, 2018–2026

Over the record, the business generated ¥5.35T of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

  • Reinvested¥3.42T · 64%
  • Dividends¥1.17T · 22%
  • Buybacks¥902.5B · 17%
  • Returned to owners¥2.07T

    107% of the owner earnings the business produced over the span, ¥1.17T as dividends and ¥902.5B as buybacks.

  • Average price paid for buybacks—

    Buybacks ran ¥902.5B over the span, but the filings don't tag the share count needed to deduce the average price paid.

  • Net change in share count−8.4%

    The diluted count fell from 3176M to 2911M, so the buybacks outran the stock issued to staff.

  • Dividend record¥60.70/sh

    Paid in 9 of the years on record, the per-share dividend growing about 9% a year. It was never cut over the span.

  • Return on what it retained44%

    Of the earnings it kept rather than paid out (¥447.9B over the span), annual owner earnings (first three years vs last three) grew ¥195.2B, so each retained ¥1 added about 0.44 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Inverting the record

Invert: instead of why Denso is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2026.

2 of the 5 tests turned up something to look into; the other 3 came back clean.

  • Look hereDid debt outgrow the business?¥202.0B → ¥811.3B

    Debt rose from ¥202.0B to ¥811.3B while owner earnings went from about ¥168.0B to ¥363.2B — about 1.2 years of owner earnings in debt then, about 2.2 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

  • Look hereDid receivables and inventory outpace sales?8% → 19% of sales

    Receivables and inventory grew from ¥359.1B to ¥1.41T while revenue grew 67%: working capital is climbing faster than sales (8% of revenue then, 19% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean
  • Is it less profitable than it was?
  • Did the share count rise anyway?
  • Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

III

The price

What a price would have to assume, set against the record above.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Denso has delivered.

¥

Through the cycle, Denso earns about ¥249.9B on its 3.3% median owner-earnings margin. This year’s 1.9% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base

—

The assumptions

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—
Owner-earnings growth · ’22→’26+15%/yr
Owner-earnings growth · ’18→’26+6%/yr
Owner-earnings yield—
P/E (3-yr earnings ’24–’26)—
P/B—
Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings ¥140.9B on 2911M diluted shares; net cash ¥377.8B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh 6902 against another business →

Figures from EDINET, the Financial Services Agency’s disclosure system, the same kind of filing the US pages draw from EDGAR. A separate pool: these names never pass through the US industry classifier.

Manual order: ← 6861 its page in the Manual 6920 →

Industry order: ← 6473 the Auto Components chapter ADNT →