Is Nanexa (STO:NANEXA) Using Debt Sensibly?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. As with many other companies Nanexa AB (publ) (STO:NANEXA) makes use of debt. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

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. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Nanexa's Debt?

The image below, which you can click on for greater detail, shows that at September 2025 Nanexa had debt of kr21.4m, up from kr1.25m in one year. However, it does have kr24.8m in cash offsetting this, leading to net cash of kr3.41m.

How Strong Is Nanexa's Balance Sheet?

The latest balance sheet data shows that Nanexa had liabilities of kr15.3m due within a year, and liabilities of kr21.4m falling due after that. Offsetting this, it had kr24.8m in cash and kr7.03m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by kr4.92m.

Having regard to Nanexa's size, it seems that its liquid assets are well balanced with its total liabilities. So it's very unlikely that the kr404.6m company is short on cash, but still worth keeping an eye on the balance sheet. While it does have liabilities worth noting, Nanexa also has more cash than debt, so we're pretty confident it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But it is Nanexa'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 Nanexa

In the last year Nanexa had a loss before interest and tax, and actually shrunk its revenue by 37%, to kr32m. That makes us nervous, to say the least.

So How Risky Is Nanexa?

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 Nanexa lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through kr58m of cash and made a loss of kr39m. With only kr3.41m on the balance sheet, it would appear that its going to need to raise capital again soon. Overall, we'd say the stock is a bit risky, and we're usually very cautious until we see positive free cash flow. 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. To that end, you should learn about the 6 warning signs we've spotted with Nanexa (including 3 which are significant) .

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.