Is SpiderPlus (TSE:4192) Using Too Much Debt?

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.' 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 SpiderPlus & Co. (TSE:4192) does use debt in its business. But should shareholders be worried about its use of debt?

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When Is Debt A Problem?

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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. 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. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is SpiderPlus's Debt?

As you can see below, at the end of June 2025, SpiderPlus had JP¥950.0m of debt, up from JP¥855.0m a year ago. Click the image for more detail. However, its balance sheet shows it holds JP¥2.64b in cash, so it actually has JP¥1.69b net cash.

How Healthy Is SpiderPlus' Balance Sheet?

The latest balance sheet data shows that SpiderPlus had liabilities of JP¥1.22b due within a year, and liabilities of JP¥269.0m falling due after that. On the other hand, it had cash of JP¥2.64b and JP¥603.0m worth of receivables due within a year. So it can boast JP¥1.76b more liquid assets than total liabilities.

This surplus suggests that SpiderPlus has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, SpiderPlus boasts net cash, so it's fair to say it does not have a heavy debt load! 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 SpiderPlus'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 SpiderPlus

Over 12 months, SpiderPlus reported revenue of JP¥4.5b, which is a gain of 25%, although it did not report any earnings before interest and tax. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is SpiderPlus?

Statistically speaking companies that lose money are riskier than those that make money. And in the last year SpiderPlus had an earnings before interest and tax (EBIT) loss, truth be told. And over the same period it saw negative free cash outflow of JP¥82m and booked a JP¥456m accounting loss. But the saving grace is the JP¥1.69b on the balance sheet. That means it could keep spending at its current rate for more than two years. With very solid revenue growth in the last year, SpiderPlus may be on a path to profitability. Pre-profit companies are often risky, but they can also offer great rewards. 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. These risks can be hard to spot. Every company has them, and we've spotted 2 warning signs for SpiderPlus you should know about.

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.