In today’s briefing:
- Japanese Companies with Low Debt Should Evaluate Profitability in Terms of ROA Rather than ROE
Japanese Companies with Low Debt Should Evaluate Profitability in Terms of ROA Rather than ROE
- While OP margin remains flat, ROE increased moderately due to higher in total-asset-turnover. Going forward, the drivers of ROE growth are likely to continue through reductions in cash and cross-shareholdings.
- It would be more likely to find it in a company that already has high operating profit margin and where ROE can be improved by improving the total asset turnover.
- Based on my analysis so far, I assume that companies that raised their stock price valuations did so by clarifying their cash allocation policies and engaging in communication with investors.
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