Is Crane (NYSE:CR) A Risky Investment?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We note that Crane Company (NYSE:CR) does have debt on its balance sheet. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, 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.

How Much Debt Does Crane Carry?

The image below, which you can click on for greater detail, shows that Crane had debt of US$247.1m at the end of March 2025, a reduction from US$356.8m over a year. But it also has US$435.1m in cash to offset that, meaning it has US$188.0m net cash.

How Healthy Is Crane's Balance Sheet?

The latest balance sheet data shows that Crane had liabilities of US$659.5m due within a year, and liabilities of US$203.4m falling due after that. Offsetting this, it had US$435.1m in cash and US$469.1m in receivables that were due within 12 months. So it can boast US$41.3m more liquid assets than total liabilities.

Having regard to Crane's size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the US$11.0b company is struggling for cash, we still think it's worth monitoring its balance sheet. Simply put, the fact that Crane has more cash than debt is arguably a good indication that it can manage its debt safely.

View our latest analysis for Crane

Also positive, Crane grew its EBIT by 26% in the last year, and that should make it easier to pay down debt, going forward. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Crane's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Finally, a company can only pay off debt with cold hard cash, not accounting profits. While Crane has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Looking at the most recent three years, Crane recorded free cash flow of 29% of its EBIT, which is weaker than we'd expect. That's not great, when it comes to paying down debt.

Summing Up

While we empathize with investors who find debt concerning, you should keep in mind that Crane has net cash of US$188.0m, as well as more liquid assets than liabilities. And it impressed us with its EBIT growth of 26% over the last year. So is Crane's debt a risk? It doesn't seem so to us. Over time, share prices tend to follow earnings per share, so if you're interested in Crane, you may well want to click here to check an interactive graph of its earnings per share history.

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.