Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

Since Cash on Hand Will Not Decrease in FY2024, Shareholder Returns Remain a Hot Topic

Higher Valuations Require Increased Return on Capital to Attract the Attention of Overseas Investors

What Lies Behind the Inability to Come up with Flexible Cash Usage Is

Companies with Low ROEs Have Corporate Governance Practices that Only Make It So

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level. </li>
<li>Since the equity ratio of manufacturing sector is over 40% and there's little room for debt repayment, there's room for a considerable increase in dividends in conjunction with share repurchases.</li>
<li>If free cash flow isn't used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.</li>
</ul>


The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level. 
Since the equity ratio of manufacturing sector is over 40% and there's little room for debt repayment, there's room for a considerable increase in dividends in conjunction with share repurchases.
If free cash flow isn't used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.


Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient

TSE Tokyo Price Index TOPIX

Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient