This page discloses the simplified methodology beluuga.ai uses to compute Enterprise Value (EV) in its Japanese Listed Companies with Negative Enterprise Value ranking and related articles — the formula, the accounts used, the reference period, exclusions, and the change history.
EV = Market Capitalization + Interest-bearing Debt − Cash and Equivalents − Investment Securities
Equivalently, Net Cash = Cash and Equivalents + Investment Securities − Interest-bearing Debt, so EV = Market Cap − Net Cash. This is a simplified estimate, not a rigorous valuation that reflects takeover premiums, tax/legal constraints, minority interests, or the actual liquidity of non-operating assets.
We use "Cash and deposits" from the consolidated balance sheet in EDINET securities reports and quarterly/semiannual reports (or "Cash and cash equivalents" for IFRS filers), preferring consolidated figures and using the most recent quarterly, semiannual, or annual disclosure available.
Investment securities are liquid financial assets that don't correspond directly to the value of the underlying business. Separating assets required for operations from financial assets held independently of the business gives a clearer read on the value the core business itself generates, which is why we deduct them alongside cash. We use the "Investment securities" line on the consolidated balance sheet (or the corresponding financial-asset line for IFRS filers), combining current and non-current amounts. Quarterly reports sometimes fold this line into "other assets" and don't disclose it separately; in that case we use the most recently disclosed figure, or treat the company as not calculable if no figure is available.
We sum short-term borrowings, long-term borrowings, bonds, the current portion of long-term borrowings, the current portion of bonds, commercial paper, short/long-term borrowings from related parties, and convertible bonds. IFRS filers' debt includes lease liabilities; J-GAAP filers' debt excludes them, reflecting differing disclosure practice under each accounting standard.
We have expanded this scope over time as we found gaps (see "11. Version history" below). The same company's interest-bearing debt figure can therefore differ between snapshots taken on different dates purely because of a methodology change, not because anything changed at the company.
Market cap = closing price on the reference date × shares outstanding (excluding treasury shares), converted to JPY millions. Prices are exchange closing prices; share counts use the latest disclosed figures. If a stock split or treasury share buyback occurred just before the reference date, the share count may, for a short window, differ slightly from the value strictly in effect on that date. Preferred shares and other non-common-stock securities (e.g. tokushishoken) are treated as separate securities and excluded from the universe.
We always prefer consolidated figures where available, and use standalone (non-consolidated) figures only for the small number of companies that do not file consolidated statements.
Each snapshot uses the latest available consolidated financial figures (quarterly, semiannual, or annual) disclosed as of that snapshot's "financials cutoff" date. We aim to exclude information disclosed after that date, but beluuga.ai's underlying data model stores each field's "current" value rather than a full history keyed by disclosure date, so it is not a strict point-in-time extraction mechanism. As a result, disclosures made very close to the cutoff date may, in rare cases, be reflected slightly earlier or later than intended.
Banks, securities firms, insurers, other financial-sector companies (by TSE 33-industry classification), designated financial holding companies, and non-operating vehicles such as REITs and venture/country/infrastructure funds are excluded, along with operating companies outside the financial sector whose business model — payment processing, payment infrastructure, crowdfunding platforms, and the like — can structurally commingle customer funds into cash or investment securities. Because industry codes alone cannot detect the latter, this exclusion is based on a limited manual review of outliers at the top of the ranking (cash or investment securities unusually large relative to revenue), not an exhaustive audit of every listed company.
If cash, investment securities, interest-bearing debt, share price, or share count is missing for a company, we exclude it from the ranking and record the reason — we never substitute zero. When we find and correct a data error, we use the corrected figures going forward, but we do not retroactively recompute or replace previously published snapshots (archived versions remain exactly as published).
A negative EV only reflects an accounting relationship — that a company's cash and investment securities exceed the sum of its market cap and interest-bearing debt. An actual acquisition would involve a takeover premium, fees, and tax/legal constraints, and holdings may not be recoverable at face value. It does not mean a company is unconditionally cheap, or that an acquisition is guaranteed to be profitable.
Current methodology version: negative-ev-v1
When we change the methodology, we will append the change date, what changed, and its scope to this list and bump the methodology version. We do not compare snapshots that use different definitions without explanation.
Back to the latest negative-EV ranking
Published: 2026-08-26. This page discloses beluuga.ai's simplified methodology and is not investment advice or a recommendation for any specific security.