WEBULL

PEPTONIC medical (FRA:28L) Is Carrying A Fair Bit Of Debt

Simply Wall St · 4d ago

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.' 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 PEPTONIC medical AB (publ) (FRA:28L) makes use of debt. But is this debt a concern to shareholders?

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When Is Debt A Problem?

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 common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. 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.

What Is PEPTONIC medical's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 PEPTONIC medical had kr15.6m of debt, an increase on kr8.08m, over one year. On the flip side, it has kr908.0k in cash leading to net debt of about kr14.7m.

debt-equity-history-analysis
DB:28L Debt to Equity History January 8th 2026

How Strong Is PEPTONIC medical's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that PEPTONIC medical had liabilities of kr29.2m due within 12 months and no liabilities due beyond that. Offsetting this, it had kr908.0k in cash and kr2.76m in receivables that were due within 12 months. So it has liabilities totalling kr25.5m more than its cash and near-term receivables, combined.

Having regard to PEPTONIC medical's size, it seems that its liquid assets are well balanced with its total liabilities. So it's very unlikely that the kr6.01b company is short on cash, but still worth keeping an eye on the balance sheet. But either way, PEPTONIC medical has virtually no net debt, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But you can't view debt in total isolation; since PEPTONIC medical 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.

See our latest analysis for PEPTONIC medical

In the last year PEPTONIC medical had a loss before interest and tax, and actually shrunk its revenue by 46%, to kr16m. That makes us nervous, to say the least.

Caveat Emptor

Not only did PEPTONIC medical'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 kr47m. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled kr24m in negative free cash flow over the last twelve months. So to be blunt we think it is 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. Case in point: We've spotted 5 warning signs for PEPTONIC medical you should be aware of, and 4 of them are a bit unpleasant.

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.