Is Next BiomedicalLtd (KOSDAQ:389650) Using Debt In A Risky Way?

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 might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, Next Biomedical Co.,Ltd. (KOSDAQ:389650) does carry debt. But the more important question is: how much risk is that debt creating?

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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. If things get really bad, the lenders can take control of the business. 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. 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. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

How Much Debt Does Next BiomedicalLtd Carry?

As you can see below, Next BiomedicalLtd had ₩11.5b of debt, at June 2025, which is about the same as the year before. You can click the chart for greater detail. But on the other hand it also has ₩31.3b in cash, leading to a ₩19.8b net cash position.

A Look At Next BiomedicalLtd's Liabilities

According to the last reported balance sheet, Next BiomedicalLtd had liabilities of ₩12.0b due within 12 months, and liabilities of ₩2.43b due beyond 12 months. On the other hand, it had cash of ₩31.3b and ₩2.42b worth of receivables due within a year. So it can boast ₩19.3b more liquid assets than total liabilities.

This surplus suggests that Next BiomedicalLtd has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, Next BiomedicalLtd 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 Next BiomedicalLtd'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.

Check out our latest analysis for Next BiomedicalLtd

Over 12 months, Next BiomedicalLtd reported revenue of ₩12b, which is a gain of 68%, although it did not report any earnings before interest and tax. With any luck the company will be able to grow its way to profitability.

So How Risky Is Next BiomedicalLtd?

Although Next BiomedicalLtd had an earnings before interest and tax (EBIT) loss over the last twelve months, it made a statutory profit of ₩2.6b. So when you consider it has net cash, along with the statutory profit, the stock probably isn't as risky as it might seem, at least in the short term. We think its revenue growth of 68% is a good sign. We'd see further strong growth as an optimistic indication. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. To that end, you should learn about the 2 warning signs we've spotted with Next BiomedicalLtd (including 1 which is significant) .

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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