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Ureru Net Advertising GroupLtd (TSE:9235) Is Making Moderate Use Of Debt

Simply Wall St · 12/29/2025 02:10

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that Ureru Net Advertising Group Co.,Ltd. (TSE:9235) does use debt in its business. But the more important question is: how much risk is that debt creating?

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Why Does Debt Bring Risk?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is Ureru Net Advertising GroupLtd's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of October 2025 Ureru Net Advertising GroupLtd had JP¥652.0m of debt, an increase on JP¥387.0m, over one year. However, it also had JP¥528.0m in cash, and so its net debt is JP¥124.0m.

debt-equity-history-analysis
TSE:9235 Debt to Equity History December 29th 2025

How Healthy Is Ureru Net Advertising GroupLtd's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Ureru Net Advertising GroupLtd had liabilities of JP¥693.0m due within 12 months and liabilities of JP¥590.0m due beyond that. On the other hand, it had cash of JP¥528.0m and JP¥302.0m worth of receivables due within a year. So it has liabilities totalling JP¥453.0m more than its cash and near-term receivables, combined.

Given Ureru Net Advertising GroupLtd has a market capitalization of JP¥5.44b, 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. There's no doubt that we learn most about debt from the balance sheet. But it is Ureru Net Advertising GroupLtd'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 Ureru Net Advertising GroupLtd

In the last year Ureru Net Advertising GroupLtd wasn't profitable at an EBIT level, but managed to grow its revenue by 61%, to JP¥1.5b. With any luck the company will be able to grow its way to profitability.

Caveat Emptor

While we can certainly appreciate Ureru Net Advertising GroupLtd's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. Indeed, it lost JP¥121m at the EBIT level. 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 JP¥144m of cash over the last year. So to be blunt we think it is risky. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For example, we've discovered 3 warning signs for Ureru Net Advertising GroupLtd (1 shouldn't be ignored!) that you should be aware of before investing here.

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.