7731 · Nikon

Will it survive?

• Can it pay its interest? -15.0×
  Does not cover its interest
  Operating income (¥112.4B) ÷ interest expense ¥7.5B
  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? ¥61.9B
  Net debt against an operating loss
  Cash ¥158.0B − debt ¥220.0B
  What this means

  Netting ¥158.0B of cash and short-term investments against ¥220.0B of debt leaves ¥61.9B owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. 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 4%
  Below average through the cycle
  10-yr median, range -14%–20%; -14% latest = NOPAT (¥88.8B) ÷ invested capital ¥648.7B
  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 -14% 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 -1%
  Consumes cash through the cycle
  9-yr median margin, range -6%–14%; latest (¥41.0B) = operating cash (¥4.4B) − maintenance capex ¥36.5B
  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 -1% median across 9 years.

• Are earnings backed by cash? (¥4.4B)
  Loss, and burning cash
  Net income (¥86.1B) · cash from operations (¥4.4B)
  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 not.

How is the cash used?

• Where do the earnings go? —
  No surplus to allocate
  What this means

  The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.

• Investing or harvesting? 0.85×
  Maintaining
  Capex ¥36.5B ÷ depreciation ¥43.1B
  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 8 of 10
  What this means

  Lost money in 2 year(s), look at what happened there before trusting the average.

• Return on capital ≥ 15% 1 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 8% → −4% (3-yr avg ends)
  What this means

  Through the cycle the operating margin slipped — about 8% early to −4% lately, median 3% — competition or costs are biting in.

• Reinvestment, incremental ROIC −23%
  What this means

  Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.

• Worst year 2026 · −16.6% op. margin
  What this means

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

• Share count −2.0%/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.