Is AptaBio Therapeutics (KOSDAQ:293780) Weighed On By Its Debt Load?

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.' 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. We can see that AptaBio Therapeutics Inc. (KOSDAQ:293780) does use debt in its business. But the more important question is: how much risk is that debt creating?

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is AptaBio Therapeutics's Net Debt?

As you can see below, AptaBio Therapeutics had ₩8.24b of debt at June 2025, down from ₩15.4b a year prior. But it also has ₩22.6b in cash to offset that, meaning it has ₩14.3b net cash.

A Look At AptaBio Therapeutics' Liabilities

According to the last reported balance sheet, AptaBio Therapeutics had liabilities of ₩18.4b due within 12 months, and liabilities of ₩3.85b due beyond 12 months. Offsetting these obligations, it had cash of ₩22.6b as well as receivables valued at ₩1.59b due within 12 months. So it actually has ₩1.95b more liquid assets than total liabilities.

This state of affairs indicates that AptaBio Therapeutics' balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So while it's hard to imagine that the ₩222.2b company is struggling for cash, we still think it's worth monitoring its balance sheet. Simply put, the fact that AptaBio Therapeutics has more cash than debt is arguably a good indication that it can manage its debt safely. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since AptaBio Therapeutics 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.

Check out our latest analysis for AptaBio Therapeutics

Over 12 months, AptaBio Therapeutics reported revenue of ₩3.1b, which is a gain of 51%, 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 AptaBio Therapeutics?

Statistically speaking companies that lose money are riskier than those that make money. And in the last year AptaBio Therapeutics had an earnings before interest and tax (EBIT) loss, truth be told. And over the same period it saw negative free cash outflow of ₩15b and booked a ₩25b accounting loss. But at least it has ₩14.3b on the balance sheet to spend on growth, near-term. AptaBio Therapeutics's revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. By investing before those profits, shareholders take on more risk in the hope of bigger rewards. 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. For instance, we've identified 1 warning sign for AptaBio Therapeutics that 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.