Canon 2007 Annual Report Download - page 57

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55
Working capital in fiscal 2007 decreased by ¥266,960 million
(U.S.$2,342 million), to ¥1,352,082 million (U.S.$11,860 million),
compared with ¥1,619,042 million in fiscal 2006 and ¥1,379,941
million in fiscal 2005. This decrease was primarily a result of a
decrease in cash and cash equivalents. Canon believes its
working capital will be sufficient for its requirements for the
foreseeable future. Canon’s capital requirements are primarily
dependent on management’s business plans regarding the
levels and timing of capital expenditures and investments. The
working capital ratio (ratio of current assets to current liabilities)
for fiscal 2007 was 2.08 compared to 2.39 for fiscal 2006 and
2.28 for fiscal 2005.
Return on assets (Net income divided by the average of total
assets) was 10.8% in fiscal 2007, compared to 10.6% in fiscal
2006 and 10.1% in fiscal 2005.
Return on stockholders’ equity (Net income divided by the
average of total stockholders’ equity) was 16.5% in fiscal 2007
compared with 16.3% in fiscal 2006 and 16.0% in fiscal 2005.
Debt to total assets ratio was 0.6%, 0.7% and 0.8% as of
December 31, 2007, 2006 and 2005, respectively. Canon had
short-term loans and long-term debt of ¥26,997 million
(U.S.$237 million) as of December 31, 2007, ¥31,151 million
as of December 31, 2006 and ¥32,141 million as of
December 31, 2005.
OFF-BALANCE SHEET ARRANGEMENTS
As part of its ongoing business, Canon does not participate in
transactions that generate relationships with unconsolidated
entities or financial partnerships, such as entities often referred
to as structured finance or special purpose entities, which
would have been established for the purpose of facilitating
off-balance sheet arrangements or other contractually narrow
or limited purposes.
Canon provides guarantees for bank loans of its employees,
affiliates and other companies. Canon would have to perform
under a guarantee if the borrower defaults on a payment
within the contract periods of 1 year to 30 years in the case of
employees with housing loans, and of 1 year to 10 years in the
case of affiliates and other companies. The maximum amount
of undiscounted payments Canon would have had to make in
the event of default by all borrowers was ¥27,946 million
(U.S.$245 million) at December 31, 2007. The carrying amounts
of the liabilities recognized for Canon’s obligations as a guarantor
under those guarantees were insignificant.
Working Capital Ratio
2.5 20
0
03 04 05 06 07
Return on Stockholders’ Equity
(%)
0
03 04 05 06 07
2.33 2.27 2.28 2.39
15.9 16.8 16.0 16.3
2.08 16.5