Square Enix 2005 Annual Report Download - page 17

15
Annual Report 2005
2. Analysis of Financial Policy, Capital
Resources and Liquidity
The Group internally finances working capital and capital
investment. As of March 31, 2005, there was no balance of
interest-bearing debt. Cash and cash equivalents totaled
¥81,243 million at the end of this fiscal year.
The Group believes that it is possible to procure the
funds required for working capital and capital investment in
the future to maintain growth based on its sound financial
standing and ability to generate cash through operating
activities.
3. Analysis of Business Performance
for Fiscal 2005
Total Assets
Years ended March 31 Millions of yen
2004 2005 Change
¥110,633 ¥131,695 ¥21,061
Total assets for fiscal 2005 amounted to ¥131,695 million,
an increase of ¥21,061 million compared with the previous
fiscal year. The breakdown of this increase is as follows.
Cash and Time Deposits
Years ended March 31 Millions of yen
2004 2005 Change
¥58,676 ¥81,243 ¥22,567
Net cash provided by operating activities totaled ¥24,873
million.
Under cash flows from investing activities, we posted
proceeds from redemption of investment securities of
¥2,000 million, comprised of redemption of government
bonds. Payments for acquiring property and equipment
decreased ¥1,390 million, primarily due to expenses related
to the moving of our head office posted in the previous
fiscal year. Accordingly, net cash provided by (used in)
investing activities increased ¥574 million.
Net cash used in financing activities decreased ¥2,907
million, mainly due to payments for dividends.
Notes and Accounts Receivable
Years ended March 31 Millions of yen
2004 2005 Change
¥12,046 ¥7,670 ¥(4,375)
Notes and accounts receivable changes according to the
timing of releases. In fiscal 2005, we did not release any
“million-seller” titles. Accordingly, as of March 31, 2005,
notes and accounts receivable came to ¥7,670 million, a
decrease of ¥4,375 million.
Content Production Account
Years ended March 31 Millions of yen
2004 2005 Change
¥10,128 ¥15,510 ¥5,381
As a rule, content development costs for authorized pro-
ductions are capitalized in the content production account
until release. When the content (title) is released, this
amount is then recorded as expenses.
Content development costs for authorized productions
are reevaluated based on the current business environment.
For those titles that we decided not to release as a part of
this reevaluation process, we have posted these as a loss
of write-off of content development account or as an
extraordinary loss.
Costs during the pre-production phase before production
is approved are posted as selling, general and administrative
(SG&A) expenses.
As of March 31, 2005, content production account
increased ¥5,381 million, to ¥15,510 million, as a result of
development underway for several large titles scheduled
for release by the end of March 2006.
Deferred Tax Assets
Years ended March 31 Millions of yen
2004 2005 Change
¥1,850 ¥3,440 ¥1,590
As a result of a temporary increase in corporate tax
payable, deferred tax assets increased ¥1,590 million.
Intangible Assets
Years ended March 31 Millions of yen
2004 2005 Change
¥7,550 ¥6,096 ¥(1,454)
Intangible assets decreased ¥1,454 million, mainly as a
result of ¥1,236 million of goodwill depreciation from the
purchase of UIEvolution Inc., in the previous fiscal year.
Investment Securities
Years ended March 31 Millions of yen
2004 2005 Change
¥3,516 ¥1,295 ¥(2,221)
Mainly as a result of the redemption of government bonds,
investment securities decreased ¥2,221 million.