Consolidated Financial Highlights

	Millions of yen		Thousands of U.S. dollars (Note)
	2016	2017	2017
Consolidated operating results
Net sales	¥144,870	¥158,428	$1,400,038
Operating income	15,134	16,665	147,277
Ordinary income	14,405	17,193	151,398
Profit attributable to owners of parent	8,098	10,744	94,952
ROE	11.1%	13.2%	13.2%
Dividend payout ratio	19.6%	16.4%	16.4%
Plant and equipment investment	29,441	26,584	234,932
Consolidated financial position
Total assets	220,836	227,545	2,010,825
Net assets	81,434	91,788	811,142
Equity ratio	34.7%	37.9%	37.9%
Consolidated cash flows
Net cash provided by (used in) operating activities	26,618	37,788	333,937
Net cash provided by (used in) investing activities	–8,940	–4,747	(41,949)
Net cash provided by (used in) financing activities	–20,726	–30,960	(273,601)
Cash and cash equivalents at end of period	33,069	35,160	310,714

Information per share of common stock	yen		U.S. dollars (Note)
Net income per share	¥229.16	¥304.05	$2.68
Net assets per share	2,169.93	2,440.41	21.56
Dividends per share	45.00	50.00	0.44

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥113.16=US $1, the approximate exchange rate on October 31, 2017. approximate exchange rate on October 31, 2016.

Finance and Investment Strategies

A unique financial strategy corresponding to the characteristics of a stock business

Because equipment rental is a stock-based business, Kanamoto’s
debt/equity ratio is higher than in other industries. As a financial strategy to service this debt, the Company is working to increase shareholders’ equity, and reducing interest-bearing debt and streamlining its balance sheet to limit capital asset investment to within the scope of annual cash flow.

A future-oriented investment strategy to secure the source of Kanamoto’s earnings

The Company makes vigorous capital investments annually, which result in an amortization burden corresponding to this volume of assets. Equipment rental, however, is a business characterized by the ability to receive a gain from the sale of used equipment after rental earnings have been ensured. In other words, the depreciation expenses incurred during each fiscal year become the source of future earnings. For this reason, Kanamoto considers its most important management indicators to be EBITDA+ (operating income + depreciation and amortization expense + lease fee payments + installment payment charges + purchase payments for small-scale construction equipment and inexpensive rental assets) and ROI (return on investment), rather than current year operating results, and strives to achieve growth in these indicators.