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Is Organoidsciences (KOSDAQ:476040) Using Debt Sensibly?

Simply Wall St · 1d ago

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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. Importantly, Organoidsciences Ltd. (KOSDAQ:476040) does carry debt. But is this debt a concern to shareholders?

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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. 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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is Organoidsciences's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Organoidsciences had ₩5.63b of debt, an increase on ₩2.00b, over one year. However, its balance sheet shows it holds ₩22.9b in cash, so it actually has ₩17.3b net cash.

debt-equity-history-analysis
KOSDAQ:A476040 Debt to Equity History December 29th 2025

How Healthy Is Organoidsciences' Balance Sheet?

According to the last reported balance sheet, Organoidsciences had liabilities of ₩6.75b due within 12 months, and liabilities of ₩5.65b due beyond 12 months. Offsetting these obligations, it had cash of ₩22.9b as well as receivables valued at ₩283.9m due within 12 months. So it actually has ₩10.8b more liquid assets than total liabilities.

This short term liquidity is a sign that Organoidsciences could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Organoidsciences boasts net cash, so it's fair to say it does not have a heavy debt load! When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Organoidsciences 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 Organoidsciences

In the last year Organoidsciences wasn't profitable at an EBIT level, but managed to grow its revenue by 37%, to ₩2.5b. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is Organoidsciences?

Statistically speaking companies that lose money are riskier than those that make money. And we do note that Organoidsciences had an earnings before interest and tax (EBIT) loss, over the last year. Indeed, in that time it burnt through ₩14b of cash and made a loss of ₩14b. But at least it has ₩17.3b on the balance sheet to spend on growth, near-term. Organoidsciences's revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. By investing before those profits, shareholders take on more risk in the hope of bigger rewards. 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. To that end, you should be aware of the 2 warning signs we've spotted with Organoidsciences .

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.