Sotoh Co Ltd

SOTOH CO.,LTD. maintains a strong liquidity position with a current ratio of 2.64, indicating the company can cover its short-term obligations more than two times over [doc:HA-latest]. The company holds JPY 1,901,351,000 in cash and equivalents, which is a significant portion of its total assets of JPY 19,915,946,000 [doc:HA-latest]. The liquidity_fpt metric confirms the company's ability to meet short-term obligations without external financing [doc:custom_valuations]. However, the company reported negative free cash flow of JPY -1,058,082,000, driven by capital expenditures of JPY -1,793,851,000 [doc:HA-latest]. Profitability metrics show mixed results. The company's return on equity (ROE) is 2.74%, and return on assets (ROA) is 2.04%, both below the industry median for Textiles & Leather Goods [doc:valuation_snapshot]. Despite a gross profit of JPY 936,356,000, the company reported an operating loss of JPY -219,532,000, indicating inefficiencies in cost control or pricing [doc:HA-latest]. The net income of JPY 406,794,000 was supported by non-operating gains or cost reductions, not core operations [doc:HA-latest]. The company operates in three segments: Dyeing, Textile, and Real Estate. The Dyeing and Textile segments focus on high-grade fashion and uniform materials, while the Real Estate segment generates income from leasing stores and land to mass retailers [doc:HA-latest]. Revenue concentration data is not disclosed, but the Real Estate segment may provide stable cash flow, contrasting with the cyclical nature of the Textile and Dyeing segments [doc:HA-latest]. Growth trajectory is uncertain. The company's revenue of JPY 10,043,078,000 in the latest period is flat compared to prior years, and no significant growth is projected for the next fiscal year [doc:outlook]. The operating loss suggests potential challenges in maintaining margins amid rising input costs or competitive pressures [doc:HA-latest]. The capital expenditure of JPY -1,793,851,000 indicates ongoing investment in production capabilities, but the negative free cash flow raises questions about the sustainability of these investments [doc:HA-latest]. Risk factors include low liquidity risk and low dilution risk, with no immediate filing-based flags detected [doc:risk_assessment]. The debt-to-equity ratio of 0.05 is well below the industry median, indicating a conservative capital structure [doc:valuation_snapshot]. However, the operating loss and negative free cash flow suggest potential credit risk if the company cannot improve operational efficiency [doc:HA-latest]. No dilution sources were identified in recent filings, and the company has not issued new shares in the past year [doc:risk_assessment]. Recent events include the release of the latest financial results, which showed a net income of JPY 406,794,000 despite an operating loss [doc:HA-latest]. Analysts have noted the discrepancy between the operating performance and net income, suggesting non-operating items may have offset the loss [doc:IR observations]. No major regulatory or geopolitical events have been disclosed that would directly impact the company's operations [doc:risk_assessment].