7309 · Shimano

Will it survive?

• Can it pay its interest? 474.1×
  Comfortable
  Operating income ¥51.7B ÷ interest expense ¥109M
  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? +¥468.8B
  Net cash
  Cash ¥472.8B − debt ¥4.0B
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥468.8B, 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 23%
  High through the cycle
  10-yr median, range 19%–44%; 20% latest = NOPAT ¥40.8B ÷ invested capital ¥201.8B
  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 20% 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 14%
  Solid through the cycle
  10-yr median margin, range 8%–19%; latest ¥36.6B = operating cash ¥63.8B − maintenance capex ¥27.2B
  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 8% of revenue this year, a 14% median across 10 years. It chose to put ¥8.3B more into growth, so free cash flow this year was ¥28.3B — the gap is investment, not weakness.

• Are earnings backed by cash? 1.88×
  Cash-backed
  Cash from ops ¥63.8B ÷ net income ¥34.0B
  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? 215%
  Returned more than it generated
  Dividends + buybacks ¥78.6B ÷ Owner Earnings ¥36.6B
  What this means

  The company returned more than it generated: against ¥36.6B of Owner Earnings, ¥78.6B (215%) went back to shareholders, ¥28.6B dividends, ¥50.0B 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? 1.31×
  Expanding
  Capex ¥35.5B ÷ depreciation ¥27.2B
  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, 2016–2025

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% 10 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 19% → 14% (3-yr avg ends)
  What this means

  Through the cycle the operating margin slipped — about 19% early to 14% lately, median 19% — competition or costs are biting in.

• Reinvestment, incremental ROIC returns capital
  What this means

  The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.

• Owner earnings growth −1%/yr
  What this means

  Owner earnings shrank about 1% a year over the record.

• Worst year 2025 · 11.1% op. margin
  What this means

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

• Share count −0.8%/yr
  What this means

  The share count is shrinking, buybacks are quietly growing your slice of the business.

• Dividend record rising
  What this means

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