Kyoto Tool Co Ltd

Kyoto Tool maintains a strong liquidity position, with cash and equivalents amounting to ¥3.42 billion, representing 20.6% of total assets. The company's price-to-book ratio of 0.48 and debt-to-equity ratio of 0.07 indicate a conservative capital structure with minimal leverage. The current ratio of 3.51 further supports its ability to meet short-term obligations.

Profitability metrics show a return on equity (ROE) of 1.83% and return on assets (ROA) of 1.37%, both below the industry median for Industrial Machinery & Equipment firms. Gross margin of 39.7% (¥1.07 billion gross profit on ¥2.69 billion revenue) is in line with sector norms, but operating margin of 14.2% (¥383.4 million operating income) suggests moderate efficiency in cost control.

The company's revenue is concentrated in disclosed segments, with no geographic breakdown provided in the latest financials. This lack of geographic diversification may expose the firm to regional economic volatility. Kyoto Tool's operating cash flow of ¥503.2 million and capital expenditure of -¥203.6 million (net outflow) suggest a focus on maintaining rather than expanding production capacity.

Outlook data indicates a stable revenue trajectory, with no significant growth or contraction expected in the current or next fiscal year. The price-to-earnings ratio of 26.05 implies a premium valuation relative to earnings, but the low price-to-book ratio suggests undervaluation of tangible assets. Analyst estimates for revenue and EPS align closely with reported figures, indicating a stable earnings profile.

Risk assessment reveals low liquidity and dilution risk, with no immediate filing-based flags detected. The company's low debt load and high cash reserves reduce financial distress risk. However, the ROE and ROA figures suggest limited capital efficiency, which could constrain long-term value creation.

Recent filings and transcripts show no material events affecting the company's operations or financial position. The absence of significant capital raises or strategic announcements in the latest disclosures supports the low dilution risk assessment.

Revenue grew at a 5.4% CAGR over the last four fiscal years.

Cash conversion ratio of 2.21 significantly exceeds the peer median of 0.95.

Debt-to-equity ratio of 0.07 is well below the peer median of 0.20.

Free cash flow turned negative to -360 million JPY in FY2025.

Return on equity of 1.8% is below the peer median of 3.6%.

Revenue ¥1.99B, −1,9% YoY; Operating income +82,1% YoY.

• ▍Revenue ¥1.99B, −1,9% YoY
• ▍Operating income +82,1% YoY
• ▍Net income +73,3% YoY
• ▍Net margin 9.5%

Revenue ¥1.96B, −6,1% YoY; Operating income −131,0% YoY.

• ▍Revenue ¥1.96B, −6,1% YoY
• ▍Operating income −131,0% YoY
• ▍Net income +87,8% YoY
• ▍Net margin 16.9%

Revenue ¥1.80B, −7,2% YoY; Operating income −367,0% YoY.

• ▍Revenue ¥1.80B, −7,2% YoY
• ▍Operating income −367,0% YoY
• ▍Net income −356,4% YoY
• ▍Net margin -10.3%

Revenue ¥2.99B, +10,9% YoY; Operating income −30,6% YoY.

• ▍Revenue ¥2.99B, +10,9% YoY
• ▍Operating income −30,6% YoY
• ▍Net income −20,8% YoY
• ▍Net margin 6.0%

Revenue ¥2.03B; Operating income ¥106.3M.

• ▍Revenue ¥2.03B
• ▍Operating income ¥106.3M
• ▍Net margin 5.4%

Revenue ¥2.09B; Operating income ¥256.0M.

• ▍Revenue ¥2.09B
• ▍Operating income ¥256.0M
• ▍Net margin 8.4%

Revenue ¥1.94B; Operating income ¥80.0M.

• ▍Revenue ¥1.94B
• ▍Operating income ¥80.0M
• ▍Net margin 3.7%

Revenue ¥2.69B; Operating income ¥383.4M.

• ▍Revenue ¥2.69B
• ▍Operating income ¥383.4M
• ▍Net margin 8.4%

Revenue ¥9.05B, +7,3% YoY; Operating income −15,5% YoY.

• ▍Revenue ¥9.05B, +7,3% YoY
• ▍Operating income −15,5% YoY
• ▍Net income −6,5% YoY
• ▍Free cash flow −158,9% YoY
• ▍Net margin 6.0%

Revenue ¥8.43B, +0,4% YoY; Operating income +6,7% YoY.

• ▍Revenue ¥8.43B, +0,4% YoY
• ▍Operating income +6,7% YoY
• ▍Net income −1,9% YoY
• ▍Free cash flow +12,5% YoY
• ▍Net margin 6.9%

Revenue ¥8.40B, +5,7% YoY; Operating income +8,3% YoY.

• ▍Revenue ¥8.40B, +5,7% YoY
• ▍Operating income +8,3% YoY
• ▍Net income +17,5% YoY
• ▍Free cash flow +71,0% YoY
• ▍Net margin 7.1%

Revenue ¥7.94B, +8,5% YoY; Operating income +49,2% YoY.

• ▍Revenue ¥7.94B, +8,5% YoY
• ▍Operating income +49,2% YoY
• ▍Net income +48,2% YoY
• ▍Free cash flow −20,6% YoY
• ▍Net margin 6.4%