7453 · Ryohin Keikaku (MUJI)

Will it survive?

• Can it pay its interest? 26.7×
  Comfortable
  Operating income ¥73.8B ÷ interest expense ¥2.8B
  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? +¥33.2B
  Net cash
  Cash ¥135.4B − debt ¥102.1B
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥33.2B, 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? —
  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 18%
  High through the cycle
  9-yr median, range 0%–25%; 21% latest = NOPAT ¥58.3B ÷ invested capital ¥275.6B
  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 9 years (it ran 21% 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%
  Solid through the cycle
  9-yr median margin, range -4%–12%; latest ¥50.0B = operating cash ¥73.4B − maintenance capex ¥23.3B
  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 6% of revenue this year, a 5% median across 9 years.

• Are earnings backed by cash? 1.44×
  Cash-backed
  Cash from ops ¥73.4B ÷ net income ¥50.8B
  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? 29%
  Reinvests most of it
  Dividends + buybacks ¥14.4B ÷ Owner Earnings ¥50.0B
  What this means

  Of ¥50.0B Owner Earnings, ¥14.4B (29%) went back to shareholders, ¥11.6B dividends, ¥2.8B 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? 0.94×
  Maintaining
  Capex ¥23.3B ÷ depreciation ¥24.8B
  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, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 8 of 9
  What this means

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

• Return on capital ≥ 15% 5 of 9 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 11% → 8% (3-yr avg ends)
  What this means

  Through the cycle the operating margin slipped — about 11% early to 8% lately, median 8% — competition or costs are biting in.

• Reinvestment, incremental ROIC 13%
  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 grew about 5% a year over the record.

• Worst year 2020 · 0.5% 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.