These Japanese companies have the most cash in their pockets.
Japan has always been known as a global leader for technology and IT development, but like every country, their economy is full of successful business in all kinds of industries. So that might lead you to wonder, what kinds of companies are the richest? On August 25, business consulting company Risk Monster (who previously investigated which Japanese companies are expected to still be around in 50 years) looked into it, and compiled a list of the companies in Japan with the fattest wallets.
Now, it’s important to note that what Risk Monster compared to make this list was not gross profits or annual income, but rather the net cash recorded in each of the company’s account books at the time of the survey.
In accounting, net cash measures a company’s ability to quickly pay expenses and debts. It’s calculated as total cash (including assets that can be quickly turned to cash) minus total liabilities. While it doesn’t necessarily mean that a company is having high profits, in general, having high net cash is a good thing, because the more you have, the more you can use to expand your business.
Either way, for the purposes of Risk Monster’s survey, companies with high net cash are considered “rich” because they have money to spend. (and also because the standard Japanese phrase for “rich,” kanemochi, literally means “has money”). You might expect big international names like Sony or Honda to be on the list of companies that have high net cash, but actually the majority are not the usual world-famous, globally branded Japanese companies that you might be familiar with. Well, except for the top richest company, which is probably Japan’s most famous company of all, even over major tech and car companies. If you think about it a little, you might be able to guess who it is.
Starting with number 10, the top ten richest Japanese companies are:
10. Rohm Semiconductor (257.3 billion yen/ US$2.6 billion)
9. Shimano (266.9 billion yen)
8. Taisei Corporation (274.7 billion yen)
7. Secom (360.1 billion yen)
6. Seven and I Holdings (374.7 billion yen)
5. Fanuc Corporation (405.8 billion yen)
4. Keyence (476.6 billion yen)
3. SMC Corporation (536.7 billion yen)
2. Shin-Etsu Chemical Co. (813 billion yen)
1. Nintendo (890.4 billion yen / US$8.5 billlion)
Nintendo, at the top, is the only video game company to reach the top ten in net cash amounts. Even among the top twenty, the only other company involved in the game industry is Bandai Namco Holdings at number 18 (189.8 billion yen), which is also a major presence in the toy, anime, and entertainment categories.
It’s no surprise that Nintendo would have such a huge net cash bank, as they’re a very stable, successful, global company that is capable of both earning a high positive net cash flow and attracting high investments. But what’s also interesting is the difference between the top richest and tenth richest companies’ net cash: Nintendo has more than three times as much as electronic parts manufacturing company Rohm, which might give you cause to wonder why.
What about the other companies? Many of them are either tech companies and parts manufacturers which undoubtedly need a lot of cash to participate in research and development. Some, like SMC Corporation, Keyence, and Fanuc, the third, fourth, and fifth richest companies, are in the business of automation equipment, products, and services, all of which are in high demand for manufacturing.
Shin-Etsu Chemical Co., number two on the list, is the largest chemical company in Japan with a huge share of the world’s production of PVC and silicone, so it’s no surprise that they’ve got the second most amount of cash in their purses. Coincidentally, they also produce semiconductor silicone for use in electronics, and have also worked on lithium battery development, so they, too, can fall into the tech and parts manufacturing category.
The other companies in the top ten are in different industries. You would probably expect Seven & I Holdings, the parent company of 7-11, which dominates the country’s convenience store market, to make the cut. Secom, a security company which has been working on virtual security guards, and Taisei Corporation, the construction company in charge of building Tokyo’s new Olympic stadium, are also big companies with major projects that you would expect to keep a lot of cash on hand.
But who would have thought that Shimano, which is actually a bicycle parts, fishing tackle, and rowing equipment manufacturer, would beat out Rohm, an electronic parts manufacturer?
The list gives us an interesting look at the economy of Japanese businesses. Of course, as previously mentioned, net cash does not necessarily indicate the health of a company, but it does indicate whether that company has the potential to grow in the near future, as it represents whether they have the cash to invest in new enterprises, research, and development.
In other words, Nintendo could be about invest its hundreds of billions of yen in something new. Maybe this means that the rumors of a new Nintendo Switch model could be true after all!
Source: MyNavi News via livedoor news via Hachima Kiko, Investopedia
Top image: Pakutaso
Insert images: Pakutaso (1, 2, 3)
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