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    We're Hopeful That Ribomic (TSE:4591) Will Use Its Cash Wisely

    Simply Wall St·12/08/2025 23:15:48
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    Just because a business does not make any money, does not mean that the stock will go down. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. But while the successes are well known, investors should not ignore the very many unprofitable companies that simply burn through all their cash and collapse.

    Given this risk, we thought we'd take a look at whether Ribomic (TSE:4591) shareholders should be worried about its cash burn. In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. Let's start with an examination of the business' cash, relative to its cash burn.

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    When Might Ribomic Run Out Of Money?

    You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. In September 2025, Ribomic had JP¥3.2b in cash, and was debt-free. Looking at the last year, the company burnt through JP¥1.0b. So it had a cash runway of about 3.1 years from September 2025. There's no doubt that this is a reassuringly long runway. The image below shows how its cash balance has been changing over the last few years.

    debt-equity-history-analysis
    TSE:4591 Debt to Equity History December 8th 2025

    Check out our latest analysis for Ribomic

    How Is Ribomic's Cash Burn Changing Over Time?

    Ribomic didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. Over the last year its cash burn actually increased by 16%, which suggests that management are increasing investment in future growth, but not too quickly. However, the company's true cash runway will therefore be shorter than suggested above, if spending continues to increase. Ribomic makes us a little nervous due to its lack of substantial operating revenue. So we'd generally prefer stocks from this list of stocks that have analysts forecasting growth.

    Can Ribomic Raise More Cash Easily?

    Given its cash burn trajectory, Ribomic shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

    Ribomic's cash burn of JP¥1.0b is about 28% of its JP¥3.7b market capitalisation. That's not insignificant, and if the company had to sell enough shares to fund another year's growth at the current share price, you'd likely witness fairly costly dilution.

    How Risky Is Ribomic's Cash Burn Situation?

    On this analysis of Ribomic's cash burn, we think its cash runway was reassuring, while its cash burn relative to its market cap has us a bit worried. Based on the factors mentioned in this article, we think its cash burn situation warrants some attention from shareholders, but we don't think they should be worried. On another note, Ribomic has 3 warning signs (and 1 which is concerning) we think you should know about.

    Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)