9434 · SoftBank Corp

Will it survive?

• Can it pay its interest? —
  Interest expense not tagged in the data
  What this means

  No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.

• How heavy is the debt, net of cash? ¥1.24T · 1.2× operating profit
  Modest net debt
  Cash ¥1.44T − debt ¥2.68T
  What this means

  Netting ¥1.44T of cash and short-term investments against ¥2.68T of debt leaves ¥1.24T owed, about 1.2× a year's operating profit (2.6× on the gross debt, before the cash). 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? -171d
  Negative, funded by others
  DSO 157 + DIO 0 − DPO 328 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

• Return on invested capital 22%
  High through the cycle
  9-yr median, range 15%–30%; 20% latest = NOPAT ¥823.6B ÷ invested capital ¥4.20T
  Industry peers: median 6%
  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 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 11%
  Solid through the cycle
  9-yr median margin, range 7%–17%; latest ¥823.3B = operating cash ¥1.39T − maintenance capex ¥570.5B
  Industry peers: median 6%
  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 12% of revenue this year, a 11% median across 9 years.

• Are earnings backed by cash? 2.53×
  Cash-backed
  Cash from ops ¥1.39T ÷ net income ¥550.8B
  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? 51%
  Returns about half
  Dividends + buybacks ¥418.9B ÷ Owner Earnings ¥823.3B
  What this means

  Of ¥823.3B Owner Earnings, ¥418.9B (51%) went back to shareholders, ¥418.9B dividends, ¥0 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? 0.73×
  Harvesting
  Capex ¥570.5B ÷ depreciation ¥785.3B
  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.

• Return on capital ≥ 15% 9 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 18% → 15% (3-yr avg ends)
  What this means

  Through the cycle the operating margin slipped — about 18% early to 15% lately, median 18% — 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 +8%/yr
  What this means

  Owner earnings grew about 8% a year over the record.

• Worst year 2024 · 14.4% op. margin
  What this means

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

• Dividend record paid
  What this means

  Paid a dividend in 9 of the years on record.