Understand the meaning of indicators on the spot. "Follow the Indicators"
"ROE," "operating profit margin," "equity ratio." You can see the numbers, but you don't know what the terms mean, and your reading stops there—.
This is common when you have just started investing. While searching for the meaning on another site, you might leave the original company page and lose track of what you were checking.
Kabuyomi's "Follow the Indicators" is a feature designed to reduce such back-and-forth and help you learn the meaning of indicators while looking at the numbers.
What you will learn in this article
・How to check the meaning of unknown indicators on the spot
・How to progress from single-year figures to long-term trends
・How to use "Follow the Indicators" using Toyota Motor Corporation as an example
"Follow the Indicators" is a feature that lets you learn meanings right next to the numbers
With "Follow the Indicators," when you tap on a number you are curious about, a simple explanation will open.
Furthermore, you can proceed to the long-term chart for that indicator by clicking "Trend →." The point is that you don't just stop after checking the meaning of the indicator, but can continue to verify "how it has moved over the long term for this company."
The indicators displayed are calculated automatically based on figures from securities reports.
A securities report is an abbreviation for an annual securities report, which is a detailed official report on business and finance that listed companies submit once a year.
If you don't know the name of the indicator, it is difficult to read through even if you see the numbers
Financial indicators pack a lot of meaning into short names.
For example, ROE is an indicator used to see how much profit a company has generated using the capital provided by shareholders. However, even if you look at just the name and the number, it is difficult for a beginner to imagine what it represents.
If you look only at the numbers without understanding their meaning, you tend to accept them based on impressions alone, such as "it looks high" or "it looks bad because it is falling."
On the other hand, if you can understand the meaning of the indicators, the questions you ask when looking at the numbers will change.
"What does this number represent for the company?"
"Is this a movement only for this year, or has it been continuing for some time?"
Being able to ask these questions is the first step in corporate analysis.
Let's follow ROE with Toyota Motor Corporation
This time, we will use Toyota Motor Corporation, where you can try all features without registration, as our subject. Toyota Motor Corporation is a company that develops its business centered on automobiles.
First, let's look at "Tracing Indicators" on the Toyota Motor Corporation page.
Suppose you become curious about the ROE figure there. When you tap on ROE, an easy-to-understand explanation of the indicator will open.
What you want to check first here is not "what percentage is good."
First, understand what kind of relationship between capital and profit the ROE indicator represents. Once you understand the meaning of the indicator and return to the numbers, you will be able to read it not just as a percentage, but as a "figure that shows how the company has utilized shareholder capital."
Next, proceed to the long-term chart from "Trends →".
You cannot tell from the most recent figures alone whether that state is temporary or a long-standing trend. On the long-term chart, you can observe whether there were years when it went up or down, and whether the movement is large or relatively stable.
Please check the actual ROE and the movements for each year on the Kabuyomi screen.
The order to follow at this time consists of the following three steps:
・Look at the indicator name
・Tap to understand the meaning
・Look at long-term movements via "Trends →"
Repeat this sequence every time you encounter an indicator you don't know. There is no need to memorize all the terms at once.
Before "evaluating" the numbers, confirm "what kind of numbers they are"
When you see an indicator, you might want to decide immediately whether it is good or bad.
However, even for the same indicator, how it is perceived changes depending on the company's business content and growth stage. You cannot judge an entire company based on a single number.
"Tracing Indicators" is not a feature for finding answers for buying and selling, but rather an entry point for first understanding the meaning of the numbers.
Know the meaning, look at the long-term trends, and think, "Why did it move like this?" By verifying that question through securities reports and corporate disclosure materials, the numbers and the company's business will gradually become connected.
You can also read it this way
The first method is to choose and learn only the indicators you don't know.
Instead of trying to understand all the indicators from the beginning, tap on the ones that catch your eye one by one. Reading the company page becomes a way to learn the terminology.
Another method is to track the indicators you are curious about over the long term.
Instead of judging based only on this year's figures, check the movement from the past using "Trends →". By viewing the meaning and the time axis as a set, it becomes easier to consider company characteristics that are difficult to see from single-year figures alone.
Let's try it out
With Kabuyomi, you can try all features for 8 famous companies, such as Toyota Motor Corporation and Sony Group, for free without registration.
All other listed companies can be viewed with a membership. The fee is 980 yen per month or 9,800 yen per year, both including tax.
First, try opening the Toyota Motor Corporation page and finding one indicator whose meaning you cannot explain.
Tap the number to read the explanation, and look at the long-term chart with "Trends →". That small repetition becomes practice for understanding financial indicators in your own words.
*This article is for informational purposes only and is not investment advice recommending the buying or selling of specific stocks. Please make investment decisions at your own responsibility.
*Kabuyomi's summaries and analyses are automatically generated by AI and may contain errors. When making actual investment decisions, please be sure to check the original EDINET documents or corporate disclosure materials.
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