Does Vizione Holdings Berhad (KLSE:VIZIONE) 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. As with many other companies Vizione Holdings Berhad (KLSE:VIZIONE) makes use of debt. But the real question is whether this debt is making the company risky.

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What Risk Does Debt Bring?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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 Vizione Holdings Berhad's Debt?

As you can see below, Vizione Holdings Berhad had RM17.8m of debt at May 2025, down from RM47.3m a year prior. However, it does have RM6.91m in cash offsetting this, leading to net debt of about RM10.9m.

How Healthy Is Vizione Holdings Berhad's Balance Sheet?

According to the last reported balance sheet, Vizione Holdings Berhad had liabilities of RM166.5m due within 12 months, and liabilities of RM8.42m due beyond 12 months. Offsetting these obligations, it had cash of RM6.91m as well as receivables valued at RM467.3m due within 12 months. So it actually has RM299.3m more liquid assets than total liabilities.

This surplus liquidity suggests that Vizione Holdings Berhad's balance sheet could take a hit just as well as Homer Simpson's head can take a punch. On this view, lenders should feel as safe as the beloved of a black-belt karate master. When analysing debt levels, the balance sheet is the obvious place to start. But it is Vizione Holdings Berhad'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 Vizione Holdings Berhad

Over 12 months, Vizione Holdings Berhad made a loss at the EBIT level, and saw its revenue drop to RM209m, which is a fall of 15%. That's not what we would hope to see.

Caveat Emptor

Not only did Vizione Holdings Berhad's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Its EBIT loss was a whopping RM80m. That said, we're impressed with the strong balance sheet liquidity. That will give the company some time and space to grow and develop its business as need be. While the stock is probably a bit risky, there may be an opportunity if the business itself improves, allowing the company to stage a recovery. 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. We've identified 5 warning signs with Vizione Holdings Berhad , 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.