In today’s briefing:
- Shareholder Returns Should Be Examined on a Cash Basis, Not on a Net Profit Basis
Shareholder Returns Should Be Examined on a Cash Basis, Not on a Net Profit Basis
- The pace of share repurchases in 2023 (+1.4%, YoY) is not sufficient compared to the increase in corporate profits, and there is much room for reconsideration of cash allocations.
- In Japan, where many manufacturers keep CapEx within the depreciation, it’s more important to verify whether shareholder return is appropriate on a cash basis rather than a net income basis.
- Companies that fail to formulate measures to generate ROE that exceeds the cost of capital in accordance with TSE requests are not able to achieve an appropriate cash allocation.
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