1812 · Kajima

Will it survive?

• Can it pay its interest? 9.2×
  Comfortable
  Operating income ¥240.8B ÷ interest expense ¥26.1B
  What this means

  Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.

• How heavy is the debt, net of cash? ¥444.5B · 1.8× operating profit
  Modest net debt
  Cash ¥392.3B + ST investments ¥367M − debt ¥837.2B
  What this means

  Netting ¥392.6B of cash and short-term investments against ¥837.2B of debt leaves ¥444.5B owed, about 1.8× a year's operating profit (3.5× 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 13%
  Solid through the cycle
  10-yr median, range 7%–22%; 12% latest = NOPAT ¥190.2B ÷ invested capital ¥1.55T
  Industry peers: median 9%
  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 12% 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 2%
  Thin through the cycle
  10-yr median margin, range -2%–9%; latest ¥81.1B = operating cash ¥114.6B − maintenance capex ¥33.5B
  Industry peers: median 4%
  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 3% of revenue this year, a 2% median across 10 years.

• Are earnings backed by cash? 0.65×
  Mostly cash-backed
  Cash from ops ¥114.6B ÷ net income ¥177.3B
  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? 91%
  Returns most of it
  Dividends + buybacks ¥74.0B ÷ Owner Earnings ¥81.1B — this fiscal year
  What this means

  Of ¥81.1B Owner Earnings, ¥74.0B (91%) went back to shareholders, ¥54.0B dividends, ¥20.0B 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. This year's proportion is 91%; across the record (2017–2026) it is 74%, the capital-allocation section below.

• Investing or harvesting? 1.51×
  Expanding
  Capex ¥50.5B ÷ depreciation ¥33.5B
  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% 3 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% → 6% (3-yr avg ends)
  What this means

  The recent-years average (6%) sits below the early years (8%), but the latest year (8%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is 7% — read it across the cycle, not on the dip.

• Reinvestment, incremental ROIC 2%
  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 −13%/yr
  What this means

  Owner earnings shrank about 13% a year over the record.

• Worst year 2024 · 5.1% op. margin
  What this means

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

• Dividend record rising
  What this means

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