3092 · ZOZO

Will it survive?

• Can it pay its interest? 271.0×
  Comfortable
  Operating income ¥69.4B ÷ interest expense ¥256M
  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? +¥49.4B
  Net cash
  Cash ¥69.4B − debt ¥20.0B
  What this means

  Cash and short-term investments exceed every dollar of debt by ¥49.4B, on net the company owes nothing, and can act from strength when others can't. 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 159%
  Very high (≥25%) through the cycle
  9-yr median, range 88%–269%; 102% latest = NOPAT ¥54.8B ÷ invested capital ¥53.6B
  Industry peers: median 7%
  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 102% 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 20%
  High through the cycle
  10-yr median margin, range 11%–29%; latest ¥47.7B = operating cash ¥52.5B − maintenance capex ¥4.8B
  Industry peers: median 3%
  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 21% of revenue this year, a 20% median across 10 years. Treating stock comp as the real expense it is (less (¥29M) of SBC) leaves ¥47.7B.

• Are earnings backed by cash? 1.10×
  Cash-backed
  Cash from ops ¥52.5B ÷ net income ¥47.9B
  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? 90%
  Returns about half
  Dividends + buybacks ¥42.8B ÷ Owner Earnings ¥47.7B — this fiscal year
  What this means

  Of ¥47.7B Owner Earnings, ¥42.8B (90%) went back to shareholders, ¥32.8B dividends, ¥10.0B buybacks. Net of (¥29M) stock comp, the real buyback was about ¥10.0B. 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 90%; across the record (2017–2026) it is 73%, the capital-allocation section below.

• Investing or harvesting? 0.91×
  Maintaining
  Capex ¥4.8B ÷ depreciation ¥5.3B
  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% 8 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 30% → 30% (3-yr avg ends)
  What this means

  Through the cycle the operating margin held roughly steady — about 30% early, 30% lately, median 30%.

• Reinvestment, incremental ROIC —
  What this means

  The reinvested base moved too little against the change in profit to read a reliable return on it here — the figure would be a small-denominator artifact, not a moat. Judge this one on the owner-earnings record and the cash it returns instead.

• Owner earnings growth +12%/yr
  What this means

  Owner earnings grew about 12% a year over the record.

• Worst year 2019 · 21.7% 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.