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.

Why Do Only 13% of Companies Mention P/B in Mid-Term Management Plans While Half Had P/Bs Below 1x?

The Essence of the Matter Is the Low Return on Cash Flow Generated by the Company's Business

Higher P/E Is Driver for This Stock Rally. Profit Growth Is Necessary for Further Stock Rally

Risk Taking by Managers Is Key, Weather Changing the Game or Creating a New Business

Expecting Fewer Refusals to Disclose Management Issues and More Positive Discussions with Management

Japanese Managers Have Always Wanted to Distance Themselves from Market Pressures

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>Although many companies now disclose numerical targets in their mid-term management plans, only a few still use ROE or ROIC as numerical targets(15% 1,801 companies of Metrical Universe, March 2023).</li>
<li>The fact that many companies that don't include ROE or ROIC as KPIs indicates that the management wasn't aware of the return  from the shareholders' perspective or cost of capital.</li>
<li>The 3-year mid-term business plan is built on the foundation of the actual project in progress and should be outlined to reflect its cash allocations and cash flow returns.</li>
</ul>


Although many companies now disclose numerical targets in their mid-term management plans, only a few still use ROE or ROIC as numerical targets(15% 1,801 companies of Metrical Universe, March 2023).
The fact that many companies that don't include ROE or ROIC as KPIs indicates that the management wasn't aware of the return  from the shareholders' perspective or cost of capital.
The 3-year mid-term business plan is built on the foundation of the actual project in progress and should be outlined to reflect its cash allocations and cash flow returns.


Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans

TSE Tokyo Price Index TOPIX

Few Companies Include ROE and ROIC as KPIs in Their Mid-Term Management Plans