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.

Is the Challenge of Raising the Stock Price Valuations Ultimately the Quality of Management?

What Should a Japanese Company Do to Raise Profit Margin, a Prerequisite for Higher ROE?

Companies with High ROA Have High Potential for Corporate Governance and Further ROA Improvement

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>Looking at all listed companies over past 10 years, despite the gradual dissolution of cross-holdings, the Total Asset Turnover has not increased and the Equity Ratio level has not changed.</li>
<li>Reducing equity capital through shareholder returns is effective in raising ROE, but ROE is unlikely to rise continuously if the company's cash flow does not continue to increase.</li>
<li>ROA is the product of the ROE components of net sales and asset turnover, excluding financial leverage. ROA is a key factor for increasing valuations.</li>
</ul>


Looking at all listed companies over past 10 years, despite the gradual dissolution of cross-holdings, the Total Asset Turnover has not increased and the Equity Ratio level has not changed.
Reducing equity capital through shareholder returns is effective in raising ROE, but ROE is unlikely to rise continuously if the company's cash flow does not continue to increase.
ROA is the product of the ROE components of net sales and asset turnover, excluding financial leverage. ROA is a key factor for increasing valuations.


Do Companies Tend to Focus on Shareholder Returns Because They Can't Find Investment Opportunities?

TSE Tokyo Price Index TOPIX

Do Companies Tend to Focus on Shareholder Returns Because They Can't Find Investment Opportunities?