Costamare Bulkers Holdings (NYSE:CMDB) Is Carrying A Fair Bit Of Debt

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. As with many other companies Costamare Bulkers Holdings Limited (NYSE:CMDB) makes use of debt. But the real question is whether this debt is making the company risky.

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Why Does Debt Bring Risk?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. If things get really bad, the lenders can take control of the business. 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, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does Costamare Bulkers Holdings Carry?

The image below, which you can click on for greater detail, shows that Costamare Bulkers Holdings had debt of US$166.8m at the end of June 2025, a reduction from US$346.5m over a year. However, it also had US$154.0m in cash, and so its net debt is US$12.7m.

A Look At Costamare Bulkers Holdings' Liabilities

The latest balance sheet data shows that Costamare Bulkers Holdings had liabilities of US$270.7m due within a year, and liabilities of US$182.4m falling due after that. Offsetting this, it had US$154.0m in cash and US$44.4m in receivables that were due within 12 months. So its liabilities total US$254.7m more than the combination of its cash and short-term receivables.

This is a mountain of leverage relative to its market capitalization of US$417.9m. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. When analysing debt levels, the balance sheet is the obvious place to start. But it is Costamare Bulkers Holdings's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

Check out our latest analysis for Costamare Bulkers Holdings

In the last year Costamare Bulkers Holdings had a loss before interest and tax, and actually shrunk its revenue by 14%, to US$799m. We would much prefer see growth.

Caveat Emptor

Not only did Costamare Bulkers Holdings's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). To be specific the EBIT loss came in at US$36m. 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$207m of cash over the last year. So suffice it to say we consider the stock very risky. 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. We've identified 2 warning signs with Costamare Bulkers Holdings , and understanding them should be part of your investment process.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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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.