My simple theory as to why the "analysts" are always rooting for Sony.

[Esmoreit]

NJ5 said:

CAL4M1TY said:
Is it true that nintendo has no debt? that would be incredible, makes me wonder how they can pull billions of dollars out of their own pocket for development, advertising campaigns and services. (I'm being serious, I don't think they are debt free, but it'd be amazing business if they were)

I don't think your theory is correct Deeds, I believe (like largedarrryl before me) that if the theory were correct, it'd be highly illegal and grossly unethical.

Nintendo has no debt, Microsoft has no debt either. Furthermore, Nintendo pays out much bigger cash dividends than Sony to their shareholders every year.

 

Here we go, page 7: http://www.nintendo.com/corp/report/FY07FinancialResults.pdf

As you can see, practicaly all of there credit comes from their own share. The (small) remainder are current liabilities.

Edit: @Kyros.

I must be honest, in the name of my study I had to look at several companies' balance sheet, and Nintendo is the first I see with no outstanding debt whatsoever.

You are right that making a profit (which usually on the balance sheet ends up in the credit section off the balance sheet under the shareholder's equity/retained earnings and that is what finances all other operations. But a lot of companies find it more usefull at times to take out a loan instead of selling more shares - in fear of deluding value, making it easier for companies to buy them out, etc.

So it is really impressive that Nintendo can safely finance it's operations from income alone.