6971 · Kyocera

Will it survive?

• Can it pay its interest? 8.5×
  Comfortable
  Operating income ¥118.1B ÷ interest expense ¥13.9B
  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? +¥368.2B
  Net cash
  Cash ¥455.9B − debt ¥87.7B
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥368.2B, 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? 33d
  Tight
  DSO 67 + DIO 15 − DPO 49 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 1%–5%; 3% latest = NOPAT ¥93.3B ÷ invested capital ¥2.97T
  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 3% 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 5%
  Thin through the cycle
  9-yr median margin, range 0%–10%; latest ¥67.1B = operating cash ¥226.2B − maintenance capex ¥159.2B
  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 3% of revenue this year, a 5% median across 9 years.

• Are earnings backed by cash? 1.60×
  Cash-backed
  Cash from ops ¥226.2B ÷ net income ¥141.0B
  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? 406%
  Returned more than it generated
  Dividends + buybacks ¥272.2B ÷ Owner Earnings ¥67.1B
  What this means

  The company returned more than it generated: against ¥67.1B of Owner Earnings, ¥272.2B (406%) went back to shareholders, ¥72.2B dividends, ¥200.0B 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? 1.01×
  Maintaining
  Capex ¥159.2B ÷ depreciation ¥158.2B
  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.

• 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% → 4% (3-yr avg ends)
  What this means

  The recent-years average (4%) sits below the early years (5%), but the latest year (6%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is 6% — read it across the cycle, not on the dip.

• Reinvestment, incremental ROIC 1%
  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 −5%/yr
  What this means

  Owner earnings shrank about 5% a year over the record.

• Worst year 2025 · 1.4% 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.