In today’s briefing:
- What Lies Behind the Inability to Come up with Flexible Cash Usage Is
What Lies Behind the Inability to Come up with Flexible Cash Usage Is
- Many Japanese managers have little idea that what belongs to shareholders is net profit and not free cash flow. This has created two problems.
- If Japanese companies, mostly manufacturers, use dividend payout ratios as a criterion for shareholder returns, cash on hand will not decline even if shareholder returns are increased to some extent.
- The inability to move beyond the concept of allocating investment and shareholder returns based on increases or decreases in cash may be the reason for the unclear cash allocation policy.
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