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    We're Keeping An Eye On CanBas' (TSE:4575) Cash Burn Rate

    Simply Wall St·09/04/2026 21:46:12
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    Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.

    So, the natural question for CanBas (TSE:4575) shareholders is whether they should be concerned by its rate of cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). The first step is to compare its cash burn with its cash reserves, to give us its 'cash runway'.

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    Does CanBas Have A Long Cash Runway?

    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. As at June 2026, CanBas had cash of JP¥1.4b and no debt. In the last year, its cash burn was JP¥1.4b. Therefore, from June 2026 it had roughly 12 months of cash runway. That's not too bad, but it's fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. The image below shows how its cash balance has been changing over the last few years.

    debt-equity-history-analysis
    TSE:4575 Debt to Equity History September 4th 2026

    View our latest analysis for CanBas

    How Is CanBas' Cash Burn Changing Over Time?

    Because CanBas isn't currently generating revenue, we consider it an early-stage business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. During the last twelve months, its cash burn actually ramped up 85%. While this spending increase is no doubt intended to drive growth, if the trend continues the company's cash runway will shrink very quickly. Admittedly, we're a bit cautious of CanBas due to its lack of significant operating revenues. We prefer most of the stocks on this list of stocks that analysts expect to grow.

    How Easily Can CanBas Raise Cash?

    Given its cash burn trajectory, CanBas shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Commonly, a business will sell new shares in itself to raise cash and drive growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.

    Since it has a market capitalisation of JP¥15b, CanBas' JP¥1.4b in cash burn equates to about 9.4% of its market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.

    Is CanBas' Cash Burn A Worry?

    Even though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought CanBas' cash burn relative to its market cap was relatively promising. Even though we don't think it has a problem with its cash burn, the analysis we've done in this article does suggest that shareholders should give some careful thought to the potential cost of raising more money in the future. On another note, CanBas has 5 warning signs (and 4 which shouldn't be ignored) we think you should know about.

    Of course CanBas may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.