How to Read a Company

Which provision requires a listed company to file an annual securities report for each business year?

1. The Labour Standards Act (労働基準法), Article 108
2. The Financial Instruments and Exchange Act (金融商品取引法), Article 24, paragraph 1
3. The Companies Act (会社法), Article 2
4. The Antimonopoly Act (独占禁止法), Article 9

By when must a domestic company file its annual securities report?

1. Within 6 months after the end of the business year
2. Within 3 months after the end of the business year
3. Within 45 days after the end of the business year
4. Within 1 month after the end of the business year

Which item does Article 24, paragraph 1 of the Financial Instruments and Exchange Act give as a matter to be stated in an annual securities report?

1. A breakdown of the personal assets of the officers
2. The trade name of the company, the corporate group to which it belongs, the state of its accounting and other important matters concerning the content of its business
3. The trade name of the company, the name and address of every single officer, and the names of all shareholders on the register of shareholders
4. A forecast of next year's share price

For how long is an annual securities report kept available for public inspection?

1. 3 years
2. 1 year
3. 10 years
4. 5 years

Which correctly states what EDINET is?

1. A form appended to the Cabinet Office Order on Disclosure of Corporate Affairs filed by issuers of securities
2. The portal site of official statistics of Japan
3. A web service run by the Tokyo Stock Exchange for viewing timely disclosure by listed companies
4. The electronic disclosure system for annual securities reports and other disclosure documents under the Financial Instruments and Exchange Act

Which is the correct order of chapters in Part I, corporate information, of an annual securities report?

1. Overview of the company, business overview, state of facilities, state of the filing company, state of accounting
2. State of accounting, overview of the company, business overview, state of the filing company
3. Business overview, overview of the company, state of accounting, state of facilities
4. Overview of the company, state of accounting, business overview, state of facilities

Which item is not placed under Section 1, overview of the company, in an annual securities report?

1. Research and development activities (研究開発活動)
2. Business description (事業の内容)
3. History (沿革)
4. State of related companies (関係会社の状況)

Which is not given by the instructions for preparation as a matter to be stated in the history section of an annual securities report?

1. Year-by-year trends in net sales
2. A change of trade name
3. The establishment or acquisition of a major related company
4. A merger

What is required to be stated in the business description of an annual securities report?

1. The content of the main businesses and the company's position within them, together with a business system chart
2. The personal career history of each officer and the names of the companies they worked for before joining
3. The full minutes of the general meeting of shareholders and the breakdown of votes for and against each resolution
4. The fee paid to the audit firm and the name of every certified public accountant who worked on the audit

Which combination of categories is required for separate presentation in the state of related companies of an annual securities report?

1. Two categories: companies whose latest results were profitable and those that made a loss
2. Two categories: companies with a head office in Japan and companies with a head office overseas
3. Two categories: listed companies and unlisted companies
4. Parent company, subsidiaries, affiliates and other related companies

Which item is placed under Section 2, business overview, of an annual securities report?

1. Total number of shares and related matters
2. Outline of share handling by the filing company
3. State of principal facilities
4. Business risks

Which is the correct calculation of gross profit (売上総利益)?

1. Operating profit plus non-operating income
2. Net sales minus cost of sales
3. Net sales minus selling, general and administrative expenses
4. Ordinary profit minus extraordinary losses

Which is the correct calculation of operating profit (営業利益)?

1. Net sales minus income taxes
2. Gross profit minus selling, general and administrative expenses
3. Ordinary profit minus income taxes
4. Net sales minus cost of sales

Which is the correct calculation of ordinary profit (経常利益)?

1. Gross profit plus extraordinary income, minus extraordinary losses and income taxes
2. Operating profit plus non-operating income, minus non-operating expenses
3. Operating profit minus income taxes and extraordinary losses
4. Profit before income taxes plus both extraordinary losses and extraordinary income

Which is the correct order of the profit figures as they appear in the statement of income?

1. Operating profit, gross profit, ordinary profit, profit for the period, profit before income taxes
2. Gross profit, operating profit, ordinary profit, profit before income taxes, profit for the period
3. Profit for the period, profit before income taxes, ordinary profit, operating profit, gross profit
4. Ordinary profit, operating profit, gross profit, profit for the period, profit before income taxes

Which is not one of the sections of the statement of income prescribed by Article 88, paragraph 1 of the Ordinance on Company Accounting (会社計算規則)?

1. Non-operating income
2. Deferred assets
3. Selling, general and administrative expenses
4. Non-operating expenses

How does the Regulation on Financial Statements classify the net assets section of the balance sheet?

1. Shareholders' equity (株主資本), valuation and translation adjustments (評価・換算差額等), share delivery rights (株式引受権) and subscription rights to shares (新株予約権)
2. Current liabilities (流動負債) and non-current liabilities (固定負債)
3. Current assets (流動資産), non-current assets (固定資産) and deferred assets (繰延資産)
4. Net sales (売上高), cost of sales (売上原価) and selling, general and administrative expenses (販売費及び一般管理費)

In the trends in major management indicators of an annual securities report, what is the denominator of the equity ratio (自己資本比率)?

1. Stated capital
2. Total assets
3. Net assets
4. Net sales

How many years of consolidated figures are shown in the trends in major management indicators of an annual securities report?

1. The most recent 3 consolidated fiscal years
2. The most recent 5 consolidated fiscal years
3. The most recent 2 consolidated fiscal years
4. The most recent 1 consolidated fiscal year

Which correctly describes the difference between consolidated financial statements and non-consolidated financial statements?

1. Consolidated figures treat the corporate group of parent and subsidiaries as one entity, while non-consolidated figures cover the filing company alone
2. Consolidated figures appear only in the earnings report, and non-consolidated figures only in the annual securities report
3. Consolidated figures cover the group of parent and subsidiaries, while non-consolidated figures combine the filing company with its affiliates
4. Consolidated figures leave taxes out, while non-consolidated figures include them

What approach does Accounting Standard No. 17 take to deciding the boundaries used in segment information?

1. Ordering them by number of employees
2. The management approach, which follows the divisions used for management decision-making and performance evaluation
3. Lining up the top 5 businesses by net sales and lumping the rest together as other
4. Dividing along the industry categories of the state's Japan Standard Industrial Classification, in units fixed in advance

What does the Securities Listing Regulations of the Tokyo Stock Exchange require regarding disclosure of the earnings report (決算短信)?

1. That it be disclosed on the same day the annual securities report is filed
2. That the content be disclosed immediately once the results are settled
3. That it be disclosed again after approval at the annual general meeting of shareholders
4. That it be disclosed after the audit report from the audit firm has been received

What deadline does the Tokyo Stock Exchange regard as appropriate for disclosing the earnings report?

1. Within 45 days after the end of the accounting period
2. Within 3 months after the end of the accounting period
3. Within 30 days after the end of the accounting period
4. Within 6 months after the end of the accounting period

Which correctly describes the standing of an integrated report (統合報告書)?

1. It is a disclosure document whose form the Tokyo Stock Exchange prescribes and whose filing it requires of listed companies
2. It is a document filed with the Labour Standards Inspection Office
3. It is not a document required by law, but one each company prepares voluntarily
4. It is a statutory disclosure document that the Financial Instruments and Exchange Act requires for each business year

What must a person recruiting workers make clear to those who may become workers in response to the recruitment?

1. The remuneration of each officer and the board deliberations that decided it
2. A list of the main customers, with the annual value of trade and the settlement terms for each
3. The content of the work to be performed, and wages, working hours and other working conditions
4. The shareholder structure of the company and the share of voting rights held by each major shareholder

What does the Employment Security Act provide about job openings and recruitment information supplied through advertising and the like?

1. Wages must be shown only as expected annual income, not as a monthly amount
2. Recruitment information must be supplied on paper, and electronic means are not permitted
3. No false representation and no representation causing misunderstanding may be made
4. The number of people being recruited or planned to be hired must not be shown

What does the Youth Employment Promotion Act provide about supplying youth employment information when a new-graduate applicant asks for it?

1. It need only be supplied to those who have received an informal job offer
2. Supplying it goes no further than a duty to make efforts
3. It must be supplied on request
4. The company is free to decide whether to supply it

Which combination is the correct set of the 3 categories of youth employment information?

1. Industry ranking, average annual income, and turnover rate
2. Stated capital, shareholders, and the banks used
3. The state of recruitment and hiring, the state of vocational skills development and improvement, and the state of employment management at the company
4. The state of recruitment and hiring, the level of wages and bonuses, and how complete the welfare benefit programmes are

Which is the most appropriate way to reach primary sources in company research?

1. Collecting posts by employees and former employees on review sites and relying on whichever opinion appears most often
2. Using what an acquaintance told you just as it is
3. Reading several summary and explanatory articles and adopting whatever most of them say in common
4. Going to the annual securities reports on EDINET, the IR pages of the company's official website, and government statistics

At a company information session, which question amounts to checking something on the basis of published materials?

1. Given that segment information shows several businesses, asking how assignments to them are decided
2. Asking the company to judge on the spot which is the better company, it or a rival in the same industry
3. Naming an employee and probing into their family circumstances and household
4. Asking a staff member for their personal forecast of what the share price will be next year