Does Organoidsciences (KOSDAQ:476040) Have A Healthy Balance Sheet?

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.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Organoidsciences Ltd. (KOSDAQ:476040) makes use of 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, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is Organoidsciences's Net Debt?

As you can see below, at the end of June 2025, Organoidsciences had ₩5.70b of debt, up from ₩2.00b a year ago. Click the image for more detail. However, it does have ₩32.7b in cash offsetting this, leading to net cash of ₩27.0b.

A Look At Organoidsciences' Liabilities

We can see from the most recent balance sheet that Organoidsciences had liabilities of ₩5.79b falling due within a year, and liabilities of ₩5.43b due beyond that. Offsetting this, it had ₩32.7b in cash and ₩283.9m in receivables that were due within 12 months. So it actually has ₩21.8b more liquid assets than total liabilities.

This surplus suggests that Organoidsciences has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Simply put, the fact that Organoidsciences 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 it is Organoidsciences'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.

View our latest analysis for Organoidsciences

In the last year Organoidsciences wasn't profitable at an EBIT level, but managed to grow its revenue by 43%, to ₩2.5b. With any luck the company will be able to grow its way to profitability.

So How Risky Is Organoidsciences?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And the fact is that over the last twelve months Organoidsciences lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through ₩13b of cash and made a loss of ₩13b. But at least it has ₩27.0b on the balance sheet to spend on growth, near-term. Organoidsciences'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. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should learn about the 2 warning signs we've spotted with Organoidsciences (including 1 which can't be ignored) .

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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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.