Does Betr Entertainment (ASX:BBT) Have A Healthy Balance Sheet?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. Importantly, Betr Entertainment Limited (ASX:BBT) does carry debt. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does Betr Entertainment Carry?

The image below, which you can click on for greater detail, shows that at June 2025 Betr Entertainment had debt of AU$33.4m, up from AU$174.0k in one year. But on the other hand it also has AU$104.9m in cash, leading to a AU$71.5m net cash position.

How Strong Is Betr Entertainment's Balance Sheet?

We can see from the most recent balance sheet that Betr Entertainment had liabilities of AU$72.7m falling due within a year, and liabilities of AU$11.9m due beyond that. On the other hand, it had cash of AU$104.9m and AU$1.35m worth of receivables due within a year. So it can boast AU$21.6m more liquid assets than total liabilities.

This short term liquidity is a sign that Betr Entertainment could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Betr Entertainment boasts net cash, so it's fair to say it does not have a heavy debt load! When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Betr Entertainment's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

See our latest analysis for Betr Entertainment

In the last year Betr Entertainment wasn't profitable at an EBIT level, but managed to grow its revenue by 129%, to AU$132m. So its pretty obvious shareholders are hoping for more growth!

So How Risky Is Betr Entertainment?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And the fact is that over the last twelve months Betr Entertainment lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through AU$25m of cash and made a loss of AU$15m. But the saving grace is the AU$71.5m on the balance sheet. That kitty means the company can keep spending for growth for at least two years, at current rates. Importantly, Betr Entertainment's revenue growth is hot to trot. High growth pre-profit companies may well be risky, but they can also offer great rewards. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. Case in point: We've spotted 1 warning sign for Betr Entertainment you should be aware of.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.