Top Culture Co Ltd

Top Culture Co Ltd maintains a capital structure with a debt-to-equity ratio of 4.72, indicating a high reliance on debt financing. The company's liquidity position is characterized by a current ratio of 1.0, suggesting that its current assets are just sufficient to cover its current liabilities. The price-to-book ratio of 1.34 indicates that the market value of the company is slightly above its book value.

The company's profitability is underperforming, with a return on equity of -0.075 and a return on assets of -0.0093, both of which are negative, indicating a loss-making position. The operating margin, a key metric for the retail industry, is not explicitly provided, but the negative operating income of -136,253,000 JPY suggests a significant decline in profitability.

Top Culture Co Ltd's revenue is primarily concentrated in its domestic market, with no specific geographic breakdown provided. However, the company's exposure to the Japanese market is evident from its financial reporting in JPY. The company's segments are not detailed in the provided data, but the retail nature of the business implies a focus on physical and possibly online retail channels.

The company's growth trajectory is currently negative, with a net loss of 161,747,000 JPY and a negative operating income. The outlook for the current fiscal year is not explicitly provided, but the negative financial performance suggests a challenging period ahead. The company's capital expenditure of -34,878,000 JPY indicates a reduction in investment in physical assets, which may be a strategic move to conserve cash.

The risk assessment for Top Culture Co Ltd highlights a medium liquidity risk and a low dilution risk. The key flag of negative net cash after subtracting total debt underscores the company's financial vulnerability. The company's recent financial performance, including a negative net income and operating income, suggests a need for careful monitoring of its liquidity and debt management strategies.

Recent events, such as the company's financial performance and capital structure, are reflected in the latest financial data. The company's operating cash flow of 1,107,060,000 JPY provides some liquidity, but the negative net income and operating income indicate ongoing challenges. The company's market price of 185.0 JPY and market cap of 2,888,020,200 JPY suggest a relatively small market presence.

Operating income improved by 5.5% year-over-year in FY2025, signaling a potential stabilization in core operational performance.

Long-term debt decreased to JPY 9.17 billion in FY2025, reflecting a deliberate reduction in leverage obligations.

Free cash flow outflows stabilized with only a 0.6% increase year-over-year, suggesting controlled cash burn rates.

Dilution risk is assessed as low, providing some protection for existing shareholders against equity erosion.

Revenue declined at a 10.0% CAGR over four years, demonstrating a persistent and significant contraction in top-line growth.

The company carries a high credit risk flag, indicating substantial concerns regarding its ability to meet financial obligations.

Debt-to-equity ratio of 4.72 is in the bottom quartile, signaling excessive leverage compared to peer median of 0.31.

Revenue ¥4.73B, −3,4% YoY; Operating income +2 557,9% YoY.

• ▍Revenue ¥4.73B, −3,4% YoY
• ▍Operating income +2 557,9% YoY
• ▍Net income +409,1% YoY
• ▍Net margin 1.8%

Revenue ¥4.08B, −6,6% YoY; Operating income +9,2% YoY.

• ▍Revenue ¥4.08B, −6,6% YoY
• ▍Operating income +9,2% YoY
• ▍Net income +2,6% YoY
• ▍Net margin -7.9%

Revenue ¥3.95B, −7,1% YoY; Operating income +21,3% YoY.

• ▍Revenue ¥3.95B, −7,1% YoY
• ▍Operating income +21,3% YoY
• ▍Net income +12,7% YoY
• ▍Net margin -3.7%

Revenue ¥4.41B, −6,6% YoY; Operating income −44,2% YoY.

• ▍Revenue ¥4.41B, −6,6% YoY
• ▍Operating income −44,2% YoY
• ▍Net income −44,7% YoY
• ▍Net margin -5.3%

Revenue ¥4.89B; Operating income ¥4.4M.

• ▍Revenue ¥4.89B
• ▍Operating income ¥4.4M
• ▍Net margin -0.6%

Revenue ¥4.37B; Operating income -¥305.4M.

• ▍Revenue ¥4.37B
• ▍Operating income -¥305.4M
• ▍Net margin -7.6%

Revenue ¥4.25B; Operating income -¥139.4M.

• ▍Revenue ¥4.25B
• ▍Operating income -¥139.4M
• ▍Net margin -3.9%

Revenue ¥4.72B; Operating income -¥136.3M.

• ▍Revenue ¥4.72B
• ▍Operating income -¥136.3M
• ▍Net margin -3.4%

Revenue ¥17.33B, −5,9% YoY; Operating income +5,5% YoY.

• ▍Revenue ¥17.33B, −5,9% YoY
• ▍Operating income +5,5% YoY
• ▍Net income −1,9% YoY
• ▍Free cash flow −0,6% YoY
• ▍Net margin -4.2%

Revenue ¥18.41B, −2,9% YoY; Operating income +50,4% YoY.

• ▍Revenue ¥18.41B, −2,9% YoY
• ▍Operating income +50,4% YoY
• ▍Net income +47,9% YoY
• ▍Free cash flow +53,3% YoY
• ▍Net margin -3.9%

Revenue ¥18.95B, −9,3% YoY; Operating income −410,6% YoY.

• ▍Revenue ¥18.95B, −9,3% YoY
• ▍Operating income −410,6% YoY
• ▍Net income −404,5% YoY
• ▍Free cash flow −847,9% YoY
• ▍Net margin -7.3%

Revenue ¥20.91B, −20,8% YoY; Operating income +86,8% YoY.

• ▍Revenue ¥20.91B, −20,8% YoY
• ▍Operating income +86,8% YoY
• ▍Net income +85,9% YoY
• ▍Free cash flow +91,7% YoY
• ▍Net margin -1.3%