Does CHA Vaccine Research Institute (KOSDAQ:261780) 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.' 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. We note that CHA Vaccine Research Institute (KOSDAQ:261780) does have debt on its balance sheet. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. 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, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is CHA Vaccine Research Institute's Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 CHA Vaccine Research Institute had ₩11.2b of debt, an increase on ₩9.09b, over one year. But it also has ₩31.4b in cash to offset that, meaning it has ₩20.2b net cash.

How Healthy Is CHA Vaccine Research Institute's Balance Sheet?

We can see from the most recent balance sheet that CHA Vaccine Research Institute had liabilities of ₩20.4b falling due within a year, and liabilities of ₩1.84b due beyond that. On the other hand, it had cash of ₩31.4b and ₩859.1m worth of receivables due within a year. So it can boast ₩9.99b more liquid assets than total liabilities.

This surplus suggests that CHA Vaccine Research Institute has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, CHA Vaccine Research Institute 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 you can't view debt in total isolation; since CHA Vaccine Research Institute will need earnings to service that debt. 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.

View our latest analysis for CHA Vaccine Research Institute

Over 12 months, CHA Vaccine Research Institute made a loss at the EBIT level, and saw its revenue drop to ₩159m, which is a fall of 57%. To be frank that doesn't bode well.

So How Risky Is CHA Vaccine Research Institute?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And we do note that CHA Vaccine Research Institute had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of ₩11b and booked a ₩14b accounting loss. While this does make the company a bit risky, it's important to remember it has net cash of ₩20.2b. That kitty means the company can keep spending for growth for at least two years, at current rates. Overall, its balance sheet doesn't seem overly risky, at the moment, but we're always cautious until we see the positive free cash flow. 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 CHA Vaccine Research Institute (including 1 which is concerning) .

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.