8031 · Mitsui & Co.

Will it survive?

• Can it pay its interest? —
  Not enough data
  Little or no interest expense reported
  What this means

  Operating income wasn't found in the filing data.

• How heavy is the debt, net of cash? ¥3.59T
  Net debt
  Cash ¥982.7B + ST investments ¥1.2B − debt ¥4.57T
  What this means

  Netting ¥984.0B of cash and short-term investments against ¥4.57T of debt leaves ¥3.59T owed. 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 —
  Operating income not meaningful here
  Industry peers: median 16%
  What this means

  This business earns mostly through equity-method affiliates, so its operating line understates its earning power and a ROIC built on it would mislead. Read it on return on equity and the record instead.

• Owner-earnings margin 5%
  Thin through the cycle
  9-yr median margin, range -1%–8%; latest (¥155.5B) = operating cash ¥952.9B − maintenance capex ¥1.11T
  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 -1% of revenue this year, a 5% median across 9 years. Treating stock comp as the real expense it is (less ¥18.0B of SBC) leaves (¥173.4B).

• Are earnings backed by cash? 1.14×
  Cash-backed
  Cash from ops ¥952.9B ÷ net income ¥834.0B
  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? —
  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? —
  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 10 of 10
  What this means

  Never lost money over the record, the earnings stability Graham insisted on.

• Return on capital ≥ 15% 0 of 8 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% → −1% (3-yr avg ends)
  What this means

  Through the cycle the operating margin widened — about −3% early to −1% lately, median −2% — pricing power intact or improving.

• Reinvestment, incremental ROIC 1%
  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 +1%/yr
  What this means

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

• Worst year 2017 · −3.1% op. margin
  What this means

  Operations went underwater in 2017, understand why before trusting the good years.

• Share count +5.3%/yr
  What this means

  The share count is rising, dilution works against you on a per-share basis.

• Dividend record rising
  What this means

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