Does Propanc Biopharma (NASDAQ:PPCB) Have A Healthy Balance Sheet?

Warren Buffett famously said, '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. We can see that Propanc Biopharma, Inc. (NASDAQ:PPCB) does use debt in its business. 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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. 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. 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.

How Much Debt Does Propanc Biopharma Carry?

As you can see below, at the end of June 2025, Propanc Biopharma had US$1.67m of debt, up from US$928.9k a year ago. Click the image for more detail. Net debt is about the same, since the it doesn't have much cash.

How Strong Is Propanc Biopharma's Balance Sheet?

We can see from the most recent balance sheet that Propanc Biopharma had liabilities of US$5.58m falling due within a year, and liabilities of US$147.4k due beyond that. Offsetting this, it had US$12.1k in cash and US$5.3k in receivables that were due within 12 months. So its liabilities total US$5.71m more than the combination of its cash and short-term receivables.

This deficit isn't so bad because Propanc Biopharma is worth US$21.8m, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Propanc Biopharma will need earnings to service that debt. 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 Propanc Biopharma

Since Propanc Biopharma doesn't have significant operating revenue, shareholders may be hoping it comes up with a great new product, before it runs out of money.

Caveat Emptor

Importantly, Propanc Biopharma had an earnings before interest and tax (EBIT) loss over the last year. Its EBIT loss was a whopping US$57m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. So we think its balance sheet is a little strained, though not beyond repair. However, it doesn't help that it burned through US$405k of cash over the last year. So to be blunt we think it is risky. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. To that end, you should learn about the 5 warning signs we've spotted with Propanc Biopharma (including 4 which are potentially serious) .

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.