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.

Doesn't Cooperation Rather than Competition Slow the Pace of Improvement in Disclosure in English?

The Solution to Better Corporate Governance Is to Reduce the # of Companies with Large Shareholders

More Companies Will Choose to Go Private Because They Can't Find an Effective Use for Their Cash

Higher ROE & ROA Are Keys to Higher Valuation, but This Wasn't Easy for Companies with Low Valuation

In Correlation with TOPIX, Nominal GDP Has Become Even Higher, While P/B Has Been Scarce Since 2020

How Long Will the Escape from Deflation Be a Greater Factor in Stock Price Rises than ROE?

When Will Deflationary Mindset of Managers Disappear? Some Companies Have Begun to Change, Though

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>Since 2020, there has been a divergence between P/B and TOPIX movements, complicating matters for listed companies that have been asked to raise their P/Bs.</li>
<li>Expectations are high for a rise in ROE, which has a certain correlation with nominal GDP, which is also increasingly correlated with TOPIX, as deflation exits.</li>
<li>If price pass-through fails, escaping deflation may not lead directly to higher profit margins. If profit margin increase is insufficient, reducing cash on hand is essential to increase ROE.</li>
</ul>


Since 2020, there has been a divergence between P/B and TOPIX movements, complicating matters for listed companies that have been asked to raise their P/Bs.
Expectations are high for a rise in ROE, which has a certain correlation with nominal GDP, which is also increasingly correlated with TOPIX, as deflation exits.
If price pass-through fails, escaping deflation may not lead directly to higher profit margins. If profit margin increase is insufficient, reducing cash on hand is essential to increase ROE.


Isn't It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?

TSE Tokyo Price Index TOPIX

Isn't It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?