Epson 2007 Annual Report Download - page 46

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44 Seiko Epson Corporation
Of the ¥80,000 million credit line obtained to allow the Company efficient access to funds, ¥50,000
million has not been drawn on. This, combined with cash and cash equivalents of ¥334,873 million as of
March 31, 2007, provides Epson with sufficient liquidity.
Financial Condition
Total assets as of March 31, 2007 stood at ¥1,284,412 million, a decrease of ¥40,794 million from the
previous fiscal year-end.
Current assets were up ¥17,872 million, while fixed assets decreased ¥58,666 million. The increase in
current assets was due to an upsurge in cash and cash equivalents, and other factors. The decrease in
fixed assets was primarily the result of efforts to restrain capital spending and from impairment losses,
especially in the display business.
Total liabilities as of March 31, 2007 were ¥790,077 million, a decrease of ¥28,904 million compared
to March 31, 2006.
Current liabilities dropped ¥31,246 million, while long-term liabilities were up ¥2,342 million. The
decline in current liabilities resulted from decreases in short-term borrowings (including the current portion
of long-term debt), accounts payable, and other factors.
Working capital, defined as current assets less current liabilities, was ¥337,149 million, an increase of
¥49,118 million compared with March 31, 2006. This was primarily due to an increase in cash and cash
equivalents discussed under current assets and a decrease in short-term borrowings in current liabilities.
The balance of short-term borrowings declined and the ratio of interest-bearing debt to total assets
declined from 32.4% to 31.4%.
Risks Related to Epson’sBusiness Operations
The matters relating to the state of business and financial statements set out in this report that might have
amaterial effect on the investors’ decisions are as set out in the following.
It is Epson’s policy to be aware of the possibilities of those risks that may arise and to strive to either
prevent them from arising or respond accordingly should they manifest.
This section mentions matters that relate to the future based on judgments made as of June 26, 2007.
(1) Epson relies to a significant degree on profits from its inkjet printer business
Epson’s ¥913,476 million in sales from its information-related equipment business for the year ended
March 2007 constituted 64.5% of its consolidated sales, which were ¥1,416,032 million (excluding inter-
segment). Inkjet printers and consumables accounted for much of the sales and profits of the information-
related equipment business. Thus, there is a possibility that fluctuating sales of inkjet printers and their
related supplies would have a material adverse effect on Epson’s results.