Epson 2004 Annual Report Download - page 47

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SEIKO EPSON CORPORATION 45
Net cash used in financing activities was ¥40,918 million. In the prior fiscal year, net cash provided by financing
activities was ¥9,111 million. In the year under review, ¥109,915 million was procured through our initial public
offering and the issuance of common stock through the exercise of a greenshoe option. Furthermore, cash
provided by operating activities was far higher than cash used in investing activities. A large share of these funds
was used for repayment of short-term borrowings and long-term debt. As a result, total short- and long-term
loans fell from ¥609,390 million at the end of the previous fiscal year to ¥457,000 million.
Due to these factors, there was a net increase of ¥72,895 million in cash and cash equivalents.
Long-term debt accounts for the majority of Epson’s long-term liabilities. As of March 31, 2004, long-term
debt, excluding the current portion, amounted to ¥346,769 million. Almost all of these loans are unsecured bank
loans with a weighted average interest rate of 1.25% with maturities up to March 2009. Epson also relies on
short-term bank loans and accounts payable as additional sources of liquidity. Epson is party to a line of credit
with four banks to secure an efficient source of working capital in the total maximum amount of ¥40,000 million,
all of which was unused as at March 31, 2004.
Financial Condition
Total assets as at March 31, 2004 were ¥1,206,491 million compared with ¥1,196,080 million as at March 31,
2003. Current assets increased ¥63,859 million while fixed assets decreased ¥53,448 million, mainly the result of
an increase in accumulated depreciation. The increase in current assets was mainly due to a large increase in
cash and cash equivalents, offset in part by a decrease in inventories and notes and accounts receivable, trade.
Total liabilities as at March 31, 2004 decreased to ¥789,582 million from ¥912,156 million as at March 31, 2003.
Current liabilities decreased ¥75,514 million and long-term liabilities decreased by ¥47,060 million. The decrease
in current liabilities was due mainly to decrease in short-term bank loans and the current portion of long-term
debt. A decline in long-term debt was primarily responsible for the decrease in long-term liabilities.
Working capital, defined as current assets less current liabilities, increased from ¥152,223 million as at March
31, 2003 to ¥291,596 million as at March 31, 2004. There were decreases in inventories and notes and accounts
receivable, trade, but increases in cash and cash equivalents, and decreases in short-term bank loans and the
current portion of long-term debt.
The ratio of debt to total assets was 37.9% as at March 31, 2004, well below the 50.9% as at March 31, 2003.