We Think Curasight (NGM:CURAS) Has A Fair Chunk Of Debt

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.' 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. We note that Curasight A/S (NGM:CURAS) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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Why Does Debt Bring Risk?

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. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

How Much Debt Does Curasight Carry?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 Curasight had kr.11.3m of debt, an increase on none, over one year. On the flip side, it has kr.1.51m in cash leading to net debt of about kr.9.74m.

A Look At Curasight's Liabilities

Zooming in on the latest balance sheet data, we can see that Curasight had liabilities of kr.15.2m due within 12 months and no liabilities due beyond that. On the other hand, it had cash of kr.1.51m and kr.9.47m worth of receivables due within a year. So it has liabilities totalling kr.4.17m more than its cash and near-term receivables, combined.

Given Curasight has a market capitalization of kr.74.0m, it's hard to believe these liabilities pose much threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Curasight's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for Curasight

Given its lack of meaningful operating revenue, Curasight shareholders no doubt hope it can fund itself until it has a profitable product.

Caveat Emptor

Over the last twelve months Curasight produced an earnings before interest and tax (EBIT) loss. Its EBIT loss was a whopping kr.37m. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. However, it doesn't help that it burned through kr.35m of cash over the last year. So in short it's a really risky stock. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. To that end, you should learn about the 4 warning signs we've spotted with Curasight (including 3 which are a bit unpleasant) .

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.