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華爾街日報Konecranes (HEL:KCR) Could Easily Take On More Debt
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' 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. As with many other companies Konecranes Plc (HEL:KCR) makes use of debt. But should shareholders be worried about its use of debt?
Why Does Debt Bring Risk?
Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. 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 Konecranes's Net Debt?
The image below, which you can click on for greater detail, shows that Konecranes had debt of €731.0m at the end of September 2025, a reduction from €956.7m over a year. However, its balance sheet shows it holds €756.5m in cash, so it actually has €25.5m net cash.
How Healthy Is Konecranes' Balance Sheet?
The latest balance sheet data shows that Konecranes had liabilities of €1.83b due within a year, and liabilities of €969.6m falling due after that. Offsetting this, it had €756.5m in cash and €821.1m in receivables that were due within 12 months. So its liabilities total €1.22b more than the combination of its cash and short-term receivables.
Given Konecranes has a market capitalization of €7.44b, it's hard to believe these liabilities pose much threat. However, we do think it is worth keeping an eye on its balance sheet strength, as it may change over time. While it does have liabilities worth noting, Konecranes also has more cash than debt, so we're pretty confident it can manage its debt safely.
View our latest analysis for Konecranes
Also good is that Konecranes grew its EBIT at 13% over the last year, further increasing its ability to manage debt. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Konecranes can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Finally, a company can only pay off debt with cold hard cash, not accounting profits. While Konecranes has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Over the last three years, Konecranes recorded free cash flow worth a fulsome 99% of its EBIT, which is stronger than we'd usually expect. That positions it well to pay down debt if desirable to do so.
Summing Up
Although Konecranes's balance sheet isn't particularly strong, due to the total liabilities, it is clearly positive to see that it has net cash of €25.5m. And it impressed us with free cash flow of €561m, being 99% of its EBIT. So is Konecranes's debt a risk? It doesn't seem so to us. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 1 warning sign with Konecranes , and understanding them should be part of your investment process.
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.