Does Curiox Biosystems (KOSDAQ:445680) Have A Healthy Balance Sheet?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' 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. As with many other companies Curiox Biosystems Co., Ltd (KOSDAQ:445680) makes use of debt. But should shareholders be worried about its use of debt?

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When Is Debt Dangerous?

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 common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.

What Is Curiox Biosystems's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 Curiox Biosystems had ₩7.81b of debt, an increase on none, over one year. But it also has ₩25.3b in cash to offset that, meaning it has ₩17.5b net cash.

How Healthy Is Curiox Biosystems' Balance Sheet?

We can see from the most recent balance sheet that Curiox Biosystems had liabilities of ₩20.4b falling due within a year, and liabilities of ₩1.89b due beyond that. Offsetting these obligations, it had cash of ₩25.3b as well as receivables valued at ₩748.9m due within 12 months. So it can boast ₩3.81b more liquid assets than total liabilities.

This state of affairs indicates that Curiox Biosystems' balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So it's very unlikely that the ₩632.8b company is short on cash, but still worth keeping an eye on the balance sheet. Simply put, the fact that Curiox Biosystems has more cash than debt is arguably a good indication that it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Curiox Biosystems will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View our latest analysis for Curiox Biosystems

In the last year Curiox Biosystems had a loss before interest and tax, and actually shrunk its revenue by 37%, to ₩3.9b. That makes us nervous, to say the least.

So How Risky Is Curiox Biosystems?

Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months Curiox Biosystems lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through ₩11b of cash and made a loss of ₩9.0b. But at least it has ₩17.5b on the balance sheet to spend on growth, near-term. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 3 warning signs with Curiox Biosystems (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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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.