What happens in Corona “Debt companies” ranking TOP500

The “Latest Top 500” Rich Companies “that are competitive with Corona” delivered on December 5th received a lot of feedback.

In the same ranking, companies with a large amount of net cash (cash and deposits + short-term securities held-interest-bearing liabilities-advance payments) were selected as indicators of the financial soundness of companies, but this time the opposite is true. Large borrowing relative to cash on hand = Top 500 listed companies with large negative net cash.

Net cash was calculated from each item stated in each company’s financial statements. The ranking of the same content is published at the same time every year, and this year it was posted half a year ahead of schedule due to the corona recession in July, but this time it is the definitive edition in 2020.

It should be noted that automobile manufacturers have an automobile finance (loan) business, and when calculating net cash, the negative appearance increases significantly, and the actual situation cannot be shown accurately. Therefore, Toyota Motor, Honda, Nissan Motor, etc. were excluded from the ranking this time as well as the previous time. In principle, financial companies are also excluded.

36 companies with net cash minus 1 trillion yen or more
The SoftBank Group is number one in the latest ranking. Net cash was minus 9.8 trillion yen as of the end of March 2020 (previously minus 11.8 trillion yen). The acquisition of American mobile company Sprint (now T-Mobile) in 2013 and British semiconductor design giant Arm Holdings in 2016 caused huge debt.

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However, in March of this year, it announced a policy to sell its assets in order to acquire treasury stock and reduce liabilities. As part of this, the sale of T-Mobile shares and the partial sale of shares of its subsidiary Softbank have resulted in the amount of monetization reaching 5.6 trillion yen, which exceeds the plan.

In addition, so-called heavy-duty industries such as infrastructure, general trading companies, real estate, and steel makers stood out at the top. There were 36 companies with net cash minus 1 trillion yen or more, and 177 companies with net cash of 100 billion yen or more. ENEOS Holdings, which ranked 22nd, changed its name from JXT G Holdings in June.

A large negative net cash may raise concerns about financial security, but with historically low interest rates continuing, it makes sense to take advantage of borrowing and invest in business expansion. It’s a management style. On the other hand, there are concerns that the “corona recession” will worsen, and even though the financial results are in the black, there is a concern that cash flow will deteriorate rapidly.

Is it possible to lay the groundwork for growth toward after-corona while paying attention to the cash flow of with corona? Business owners are required to steer difficult. Let’s take a look at the latest ranking.

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