Performance trends for Terrace Sky <3915>

3. Financial Condition and Management Indicators

At the end of February 2024, total assets were ¥184.46 billion, an increase of ¥29.23 billion from the previous year-end. Looking at the main factors of change, current assets decreased by ¥277 million in cash and deposits, while accounts receivable and contract assets increased by ¥591 million and prepaid expenses increased by ¥256 million, respectively. Fixed assets increased by ¥1.976 billion due to the rise in market value of investment securities and other factors, and software increased by ¥191 million.

Total liabilities were ¥58.92 billion, an increase of ¥130.1 million from the previous year-end. Looking at the main factors of change, interest-bearing liabilities decreased by ¥61 million, while accounts payable and contract liabilities increased by ¥637 million and deferred tax liabilities increased by ¥550 million, respectively. In addition, total equity increased by ¥16.21 billion from the previous year-end to ¥125.53 billion. Retained earnings increased by ¥300 million, other securities valuation differences increased by ¥1.217 billion, and non-controlling interests increased by ¥102 million.

Looking at the management indicators, although the equity ratio decreased from 61.7% at the end of the previous period to 60.2%, the interest-bearing debt ratio remains low at 2.1%, and net cash (cash and deposits minus interest-bearing debt) is over ¥5.3 billion, indicating good financial standing. In terms of profitability, ROA, ROE, and operating margin on revenue were all at low levels at 3.9%, 2.9%, and 2.7%, respectively, mainly due to proactive investments made for future growth. It is expected that the effects of these investments will become apparent after the end of February 2025 period, and profitability will also improve.

(Written by FISCO guest analyst, Jo Sato)