7267 · Honda Motor

Will it survive?

• Can it pay its interest? -5.0×
  Does not cover its interest
  Operating income (¥414.3B) ÷ interest expense ¥83.6B
  What this means

  A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.

• How heavy is the debt, net of cash? +¥4.08T
  Net cash
  Cash ¥5.07T + ST investments ¥40.0B − debt ¥1.02T
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥4.08T, 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 9%
  Solid through the cycle
  10-yr median, range -4%–13%; -4% latest = NOPAT (¥327.3B) ÷ invested capital ¥7.77T
  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 -4% 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 4%
  Thin through the cycle
  9-yr median margin, range -1%–10%; latest ¥523.2B = operating cash ¥1.14T − maintenance capex ¥612.1B
  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 4% median across 9 years.

• Are earnings backed by cash? ¥1.14T
  Loss, but cash-generative
  Net income (¥423.9B) · cash from operations ¥1.14T
  What this means

  The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

• Where do the earnings go? 183%
  Returned more than it generated
  Dividends + buybacks ¥955.3B ÷ Owner Earnings ¥523.2B
  What this means

  The company returned more than it generated: against ¥523.2B of Owner Earnings, ¥955.3B (183%) went back to shareholders, ¥284.4B dividends, ¥670.9B 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 9 of 10
  What this means

  Lost money in 1 year(s), look at what happened there before trusting the average.

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

  Through the cycle the operating margin held roughly steady — about 3% early, 3% lately, median 5%.

• Reinvestment, incremental ROIC 8%
  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 −13%/yr
  What this means

  Owner earnings shrank about 13% a year over the record.

• Worst year 2026 · −1.9% op. margin
  What this means

  Operations went underwater in 2026, understand why before trusting the good years.

• Dividend record rising
  What this means

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