Stock Analysis

Does Precision Biosensor (KOSDAQ:335810) Have A Healthy Balance Sheet?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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, Precision Biosensor, Inc. (KOSDAQ:335810) does carry debt. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

Debt assists a business until the business has trouble paying it off, either with new capital or with free 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, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Precision Biosensor's Net Debt?

The image below, which you can click on for greater detail, shows that at March 2025 Precision Biosensor had debt of ₩16.7b, up from ₩15.2b in one year. On the flip side, it has ₩3.49b in cash leading to net debt of about ₩13.3b.

debt-equity-history-analysis
KOSDAQ:A335810 Debt to Equity History June 19th 2025

How Strong Is Precision Biosensor's Balance Sheet?

We can see from the most recent balance sheet that Precision Biosensor had liabilities of ₩22.5b falling due within a year, and liabilities of ₩4.39b due beyond that. On the other hand, it had cash of ₩3.49b and ₩3.12b worth of receivables due within a year. So its liabilities total ₩20.3b more than the combination of its cash and short-term receivables.

Precision Biosensor has a market capitalization of ₩40.8b, so it could very likely raise cash to ameliorate its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. When analysing debt levels, the balance sheet is the obvious place to start. But it is Precision Biosensor's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

See our latest analysis for Precision Biosensor

In the last year Precision Biosensor wasn't profitable at an EBIT level, but managed to grow its revenue by 8.2%, to ₩20b. That rate of growth is a bit slow for our taste, but it takes all types to make a world.

Caveat Emptor

Over the last twelve months Precision Biosensor produced an earnings before interest and tax (EBIT) loss. Indeed, it lost a very considerable ₩4.9b at the EBIT level. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled ₩1.8b 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. But ultimately, every company can contain risks that exist outside of the balance sheet. Be aware that Precision Biosensor is showing 4 warning signs in our investment analysis , and 2 of those are significant...

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.

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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.