6954 · Fanuc

Will it survive?

• Can it pay its interest? —
  No meaningful interest burden
  Little or no interest expense reported
  What this means

  Little or no interest expense reported, the business isn't leaning on lenders to operate.

• How heavy is the debt, net of cash? +¥650.9B
  Net cash, debt-free
  Cash ¥615.1B + ST investments ¥35.8B − debt ¥0
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥650.9B, 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? 120d
  Long (60+ days)
  DSO 63 + DIO 89 − DPO 32 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 —
  Not enough data
  Industry peers: median 9%
  What this means

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

• Owner-earnings margin 18%
  High through the cycle
  10-yr median margin, range 6%–27%; latest ¥229.7B = operating cash ¥250.9B − maintenance capex ¥21.2B
  Industry peers: median 6%
  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 27% of revenue this year, a 18% median across 10 years.

• Are earnings backed by cash? 1.51×
  Cash-backed
  Cash from ops ¥250.9B ÷ net income ¥166.5B
  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? 41%
  Returns about half
  Dividends + buybacks ¥95.0B ÷ Owner Earnings ¥229.7B
  What this means

  Of ¥229.7B Owner Earnings, ¥95.0B (41%) went back to shareholders, ¥94.5B dividends, ¥553M 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? 0.44×
  Harvesting
  Capex ¥21.2B ÷ depreciation ¥47.8B
  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, 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.

• Operating margin 29% → 20% (3-yr avg ends)
  What this means

  Through the cycle the operating margin slipped — about 29% early to 20% lately, median 21% — competition or costs are biting in.

• Owner earnings growth +7%/yr
  What this means

  Owner earnings grew about 7% a year over the record.

• Worst year 2020 · 17.4% 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.