Is Optomed Oyj (HEL:OPTOMED) A Risky Investment?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Optomed Oyj (HEL:OPTOMED) does carry debt. But is this debt a concern to shareholders?

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Why Does Debt Bring Risk?

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. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

What Is Optomed Oyj's Net Debt?

The image below, which you can click on for greater detail, shows that Optomed Oyj had debt of €1.83m at the end of June 2025, a reduction from €2.89m over a year. However, its balance sheet shows it holds €7.09m in cash, so it actually has €5.26m net cash.

A Look At Optomed Oyj's Liabilities

We can see from the most recent balance sheet that Optomed Oyj had liabilities of €5.21m falling due within a year, and liabilities of €1.87m due beyond that. Offsetting this, it had €7.09m in cash and €2.51m in receivables that were due within 12 months. So it actually has €2.52m more liquid assets than total liabilities.

This short term liquidity is a sign that Optomed Oyj could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Optomed Oyj 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 Optomed Oyj'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.

Check out our latest analysis for Optomed Oyj

In the last year Optomed Oyj wasn't profitable at an EBIT level, but managed to grow its revenue by 9.3%, to €16m. We usually like to see faster growth from unprofitable companies, but each to their own.

So How Risky Is Optomed Oyj?

Statistically speaking companies that lose money are riskier than those that make money. And in the last year Optomed Oyj had an earnings before interest and tax (EBIT) loss, truth be told. And over the same period it saw negative free cash outflow of €4.2m and booked a €5.8m accounting loss. But at least it has €5.26m on the balance sheet to spend on growth, near-term. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. 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. For instance, we've identified 1 warning sign for Optomed Oyj that 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.