9501 · Tokyo Electric Power (TEPCO)

Will it survive?

• Can it pay its interest? 3.6×
  Adequate
  Operating income ¥337.7B ÷ interest expense ¥92.6B
  What this means

  Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.

• How heavy is the debt, net of cash? ¥5.48T · 16.2× operating profit
  Heavy net debt
  Cash ¥936.7B − debt ¥6.41T
  What this means

  Netting ¥936.7B of cash and short-term investments against ¥6.41T of debt leaves ¥5.48T owed, about 16.2× a year's operating profit (19.0× 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? —
  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 3%
  Below average through the cycle
  10-yr median, range -2%–4%; 3% latest = NOPAT ¥266.8B ÷ invested capital ¥8.44T
  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 3% 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 —
  Not enough data
  Industry peers: median 2%
  What this means

  The filing data didn't include the inputs for this check.

• Are earnings backed by cash? ¥560.3B
  Loss, but cash-generative
  Net income (¥454.3B) · cash from operations ¥560.3B
  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.

How is the cash used?

• Where do the earnings go? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

• 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 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% 0 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 5% → 4% (3-yr avg ends)
  What this means

  Through the cycle the operating margin held roughly steady — about 5% early, 4% lately, median 3%.

• Reinvestment, incremental ROIC −0%
  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 2023 · −2.8% op. margin
  What this means

  Operations went underwater in 2023, understand why before trusting the good years.

• Share count +0.0%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.