4762.T

The company maintains a relatively strong liquidity position, with a price-to-book ratio of 1.97 and a price-to-tangible-book ratio of 1.97, indicating that the market values the company's equity at nearly twice its book value. However, the company reported negative operating cash flow of -156.9 million JPY and negative free cash flow of -144.6 million JPY, suggesting that it is currently spending more cash than it is generating from operations. The current ratio of 0.85 indicates that the company's current liabilities exceed its current assets, which could pose a short-term liquidity risk.

In terms of profitability, the company's return on equity (ROE) of 16.66% and return on assets (ROA) of 8.87% are strong indicators of efficient use of equity and assets to generate profit. The company's operating income of 884.8 million JPY and net income of 542.9 million JPY reflect a healthy margin, although the gross profit margin of 31.56% (1.785 billion JPY gross profit on 5.658 billion JPY revenue) is in line with industry norms.

The company's revenue is concentrated in IT services and consulting, with no disclosed geographic breakdown. This lack of geographic diversification could expose the company to regional economic downturns or regulatory changes. The company's total revenue of 5.66 billion JPY is derived from a single business segment, which may limit its ability to adapt to market shifts.

Looking ahead, the company's growth trajectory is uncertain due to the negative operating and free cash flows. While the company has a strong balance sheet with total assets of 6.12 billion JPY and total equity of 3.26 billion JPY, the negative cash flows could hinder its ability to invest in growth opportunities. The company's debt-to-equity ratio of 0.37 suggests a conservative capital structure, but the long-term debt of 1.2 billion JPY could become a burden if interest rates rise.

The company faces several risk factors, including the potential for dilution, although the risk is currently assessed as low. The negative net cash position, after subtracting total debt, indicates that the company may need to raise additional capital in the future, which could lead to share dilution. The company's liquidity risk is moderate, and its credit risk is not explicitly stated, but the negative cash flows and current ratio below 1 suggest potential challenges in meeting short-term obligations.

Recent events, such as the company's financial performance and capital structure, are reflected in its latest financial statements. The company's capital expenditure of -506.2 million JPY indicates significant investment in long-term assets, which could support future growth but also increase financial risk in the short term. The company's shares outstanding remain unchanged at 4.18 million for both basic and diluted shares, indicating no recent dilution.