Does CurveBeam AI (ASX:CVB) Have A Healthy Balance Sheet?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We can see that CurveBeam AI Limited (ASX:CVB) does use debt in its business. But the more important question is: how much risk is that debt creating?

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When Is Debt Dangerous?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. If things get really bad, the lenders can take control of the business. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is CurveBeam AI's Net Debt?

The image below, which you can click on for greater detail, shows that at June 2025 CurveBeam AI had debt of AU$16.0m, up from AU$15.1m in one year. On the flip side, it has AU$5.04m in cash leading to net debt of about AU$10.9m.

A Look At CurveBeam AI's Liabilities

We can see from the most recent balance sheet that CurveBeam AI had liabilities of AU$8.21m falling due within a year, and liabilities of AU$17.7m due beyond that. On the other hand, it had cash of AU$5.04m and AU$3.14m worth of receivables due within a year. So it has liabilities totalling AU$17.7m more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since CurveBeam AI has a market capitalization of AU$46.5m, and so it could probably strengthen its balance sheet by raising capital if it needed to. However, it is still worthwhile taking a close look at its ability to pay off debt. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since CurveBeam AI will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

See our latest analysis for CurveBeam AI

In the last year CurveBeam AI wasn't profitable at an EBIT level, but managed to grow its revenue by 85%, to AU$12m. With any luck the company will be able to grow its way to profitability.

Caveat Emptor

While we can certainly appreciate CurveBeam AI's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. Its EBIT loss was a whopping AU$16m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. So we think its balance sheet is a little strained, though not beyond repair. However, it doesn't help that it burned through AU$12m of cash over the last year. So in short it's a really risky stock. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For example CurveBeam AI has 4 warning signs (and 2 which don't sit too well with us) we think you should know about.

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.