Does MicroPort CardioFlow Medtech (HKG:2160) 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 MicroPort CardioFlow Medtech Corporation (HKG:2160) does use debt in its business. But should shareholders be worried about its use of debt?

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What Risk Does Debt Bring?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does MicroPort CardioFlow Medtech Carry?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 MicroPort CardioFlow Medtech had CN¥255.0m of debt, an increase on CN¥27.0m, over one year. But it also has CN¥1.32b in cash to offset that, meaning it has CN¥1.07b net cash.

A Look At MicroPort CardioFlow Medtech's Liabilities

The latest balance sheet data shows that MicroPort CardioFlow Medtech had liabilities of CN¥245.5m due within a year, and liabilities of CN¥205.0m falling due after that. On the other hand, it had cash of CN¥1.32b and CN¥265.8m worth of receivables due within a year. So it actually has CN¥1.14b more liquid assets than total liabilities.

This surplus strongly suggests that MicroPort CardioFlow Medtech has a rock-solid balance sheet (and the debt is of no concern whatsoever). On this view, lenders should feel as safe as the beloved of a black-belt karate master. Succinctly put, MicroPort CardioFlow Medtech 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 MicroPort CardioFlow Medtech's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

View our latest analysis for MicroPort CardioFlow Medtech

Over 12 months, MicroPort CardioFlow Medtech made a loss at the EBIT level, and saw its revenue drop to CN¥368m, which is a fall of 4.0%. That's not what we would hope to see.

So How Risky Is MicroPort CardioFlow Medtech?

While MicroPort CardioFlow Medtech lost money on an earnings before interest and tax (EBIT) level, it actually booked a paper profit of CN¥4.9m. So taking that on face value, and considering the cash, we don't think its very risky in the near term. With mediocre revenue growth in the last year, we're don't find the investment opportunity particularly compelling. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. To that end, you should be aware of the 1 warning sign we've spotted with MicroPort CardioFlow Medtech .

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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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.