Does National Atomic Company Kazatomprom JSC (LON:KAP) 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, National Atomic Company Kazatomprom JSC (LON:KAP) does carry debt. But the more important question is: how much risk is that debt creating?

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

What Risk Does Debt Bring?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. 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 National Atomic Company Kazatomprom JSC's Debt?

The image below, which you can click on for greater detail, shows that at June 2025 National Atomic Company Kazatomprom JSC had debt of ₸191.9b, up from ₸131.3b in one year. But on the other hand it also has ₸674.2b in cash, leading to a ₸482.3b net cash position.

How Strong Is National Atomic Company Kazatomprom JSC's Balance Sheet?

We can see from the most recent balance sheet that National Atomic Company Kazatomprom JSC had liabilities of ₸891.5b falling due within a year, and liabilities of ₸349.9b due beyond that. On the other hand, it had cash of ₸674.2b and ₸584.6b worth of receivables due within a year. So its total liabilities are just about perfectly matched by its shorter-term, liquid assets.

Having regard to National Atomic Company Kazatomprom JSC's size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the ₸7.50t company is struggling for cash, we still think it's worth monitoring its balance sheet. Simply put, the fact that National Atomic Company Kazatomprom JSC has more cash than debt is arguably a good indication that it can manage its debt safely.

See our latest analysis for National Atomic Company Kazatomprom JSC

On top of that, National Atomic Company Kazatomprom JSC grew its EBIT by 35% over the last twelve months, and that growth will make it easier to handle its debt. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine National Atomic Company Kazatomprom JSC'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.

Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. National Atomic Company Kazatomprom JSC may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Over the most recent three years, National Atomic Company Kazatomprom JSC recorded free cash flow worth 54% of its EBIT, which is around normal, given free cash flow excludes interest and tax. This cold hard cash means it can reduce its debt when it wants to.

Summing Up

While we empathize with investors who find debt concerning, you should keep in mind that National Atomic Company Kazatomprom JSC has net cash of ₸482.3b, as well as more liquid assets than liabilities. And it impressed us with its EBIT growth of 35% over the last year. So is National Atomic Company Kazatomprom JSC's debt a risk? It doesn't seem so to us. Given National Atomic Company Kazatomprom JSC has a strong balance sheet is profitable and pays a dividend, it would be good to know how fast its dividends are growing, if at all. You can find out instantly by clicking this link.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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.