Is Greenbriar Sustainable Living (CVE:GRB) A Risky Investment?
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. We note that Greenbriar Sustainable Living Inc. (CVE:GRB) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together.
What Is Greenbriar Sustainable Living's Net Debt?
The image below, which you can click on for greater detail, shows that at September 2025 Greenbriar Sustainable Living had debt of CA$8.55m, up from CA$6.84m in one year. However, it also had CA$1.79m in cash, and so its net debt is CA$6.76m.
How Strong Is Greenbriar Sustainable Living's Balance Sheet?
Zooming in on the latest balance sheet data, we can see that Greenbriar Sustainable Living had liabilities of CA$15.4m due within 12 months and liabilities of CA$1.99m due beyond that. Offsetting this, it had CA$1.79m in cash and CA$4.6k in receivables that were due within 12 months. So it has liabilities totalling CA$15.6m more than its cash and near-term receivables, combined.
This is a mountain of leverage relative to its market capitalization of CA$16.3m. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution. The balance sheet is clearly the area to focus on when you are analysing debt. But it is Greenbriar Sustainable Living's earnings that will influence how the balance sheet holds up in the future. 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 Greenbriar Sustainable Living
It seems likely shareholders hope that Greenbriar Sustainable Living can significantly advance the business plan before too long, because it doesn't have any significant revenue at the moment.
Caveat Emptor
Importantly, Greenbriar Sustainable Living had an earnings before interest and tax (EBIT) loss over the last year. Indeed, it lost CA$1.5m at the EBIT level. 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 CA$1.2m in negative free cash flow over the last twelve months. So suffice it to say we consider the stock very risky. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. These risks can be hard to spot. Every company has them, and we've spotted 4 warning signs for Greenbriar Sustainable Living (of which 1 is concerning!) you should know about.
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.