Does Fuji Media Holdings (TSE:4676) Have A Healthy Balance Sheet?

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. As with many other companies Fuji Media Holdings, Inc. (TSE:4676) makes use of debt. But the more important question is: how much risk is that debt creating?

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When Is Debt A Problem?

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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. 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 Fuji Media Holdings Carry?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 Fuji Media Holdings had JP¥376.8b of debt, an increase on JP¥352.4b, over one year. On the flip side, it has JP¥196.1b in cash leading to net debt of about JP¥180.7b.

How Healthy Is Fuji Media Holdings' Balance Sheet?

The latest balance sheet data shows that Fuji Media Holdings had liabilities of JP¥195.9b due within a year, and liabilities of JP¥426.5b falling due after that. Offsetting this, it had JP¥196.1b in cash and JP¥61.0b in receivables that were due within 12 months. So it has liabilities totalling JP¥365.3b more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since Fuji Media Holdings has a market capitalization of JP¥697.2b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Fuji Media Holdings'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.

View our latest analysis for Fuji Media Holdings

In the last year Fuji Media Holdings had a loss before interest and tax, and actually shrunk its revenue by 4.7%, to JP¥537b. We would much prefer see growth.

Caveat Emptor

Over the last twelve months Fuji Media Holdings produced an earnings before interest and tax (EBIT) loss. Indeed, it lost JP¥1.0b at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled JP¥7.4b in negative free cash flow over the last twelve months. So to be blunt we think it is risky. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. For example - Fuji Media Holdings has 1 warning sign we think you should be aware of.

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.