7741 · Hoya

Will it survive?

• Can it pay its interest? —
  Not the right lens here
  What this means

  This business earns through equity-method affiliates, so interest coverage on its operating line isn't meaningful. Read its solvency on net debt against equity instead.

• How heavy is the debt, net of cash? —
  Debt under-captured — leverage unknown, not low
  What this means

  This company pays far more interest than its tagged debt implies (the rest sits under segment dimensions the data source strips), so its net cash or net debt cannot be read honestly: the gap is unknown, not zero, and 'net cash' here would be exactly the fiction the figure is meant to prevent. Judge it on the record and owner earnings instead.

• 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 —
  Debt under-captured
  Industry peers: median 16%
  What this means

  This company's interest bill implies far more debt than its filings tag at the consolidated level (the rest sits under segment dimensions the data source strips), so invested capital, and the return on it, cannot be read honestly. Judge this one on Owner Earnings and the record instead.

• Owner-earnings margin 22%
  High through the cycle
  9-yr median margin, range 21%–24%; latest ¥221.9B = operating cash ¥278.4B − maintenance capex ¥56.6B
  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 23% of revenue this year, a 22% median across 9 years.

• Are earnings backed by cash? 1.10×
  Cash-backed
  Cash from ops ¥278.4B ÷ net income ¥253.1B
  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? 114%
  Returned more than it generated
  Dividends + buybacks ¥253.9B ÷ Owner Earnings ¥221.9B
  What this means

  The company returned more than it generated: against ¥221.9B of Owner Earnings, ¥253.9B (114%) went back to shareholders, ¥81.9B dividends, ¥172.0B 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? 0.97×
  Maintaining
  Capex ¥56.6B ÷ depreciation ¥58.2B
  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.

• Operating margin 4% → 6% (3-yr avg ends)
  What this means

  Through the cycle the operating margin widened — about 4% early to 6% lately, median 7% — pricing power intact or improving.

• Owner earnings growth +7%/yr
  What this means

  Owner earnings grew about 7% a year over the record.

• Worst year 2017 · 3.5% op. margin
  What this means

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

• Share count −1.6%/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.