Nippon Steel’s investment of approximately ¥2 trillion to acquire U.S. Steel caused significant changes in total assets and liabilities on its financial statements. Reading the balance sheet and cash flow statement through Sankey diagrams reveals the expansion of its asset base and its financing movements following the acquisition.
Comparing the balance-sheet Sankey diagrams for the fiscal years ended March 2025 and March 2026, Nippon Steel’s total assets increased from ¥10.9 trillion to ¥14.7 trillion, a rise of ¥3.7 trillion. The acquisition of U.S. Steel was a major contributor, with property, plant and equipment increasing from ¥3.6 trillion to ¥5.9 trillion, an increase of ¥2.3 trillion.
Approximately ¥1.7 trillion of the increase in property, plant and equipment is attributed to assets acquired through the acquisition. While the deal expanded Nippon Steel’s business base over a short period, its impact on revenue and cash flow remains an issue for future analysis.
Liabilities increased by ¥3.6 trillion to ¥8.6 trillion, while long-term borrowings increased by approximately ¥2.7 trillion to ¥4.7 trillion. Net assets changed little, suggesting that most of the increase in total assets was attributable to higher liabilities.
The cash flow Sankey diagram shows investing CF of -¥2.8 trillion, M&A spending of approximately ¥2.0 trillion, and financing CF of +¥1.9 trillion, with approximately ¥1.5 trillion of the financing inflow coming from borrowings. Interest expense increased from ¥38.2 billion to ¥89.6 billion.
This analysis demonstrates the value of using Sankey diagrams to visualize how the expansion of assets through the acquisition and the financing movements supporting it affected Nippon Steel’s financial position.