Does Beetaloo Energy Australia (ASX:BTL) Have A Healthy Balance Sheet?
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.' 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 can see that Beetaloo Energy Australia Limited (ASX:BTL) does use debt in its business. But the more important question is: how much risk is that debt creating?
When Is Debt Dangerous?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
How Much Debt Does Beetaloo Energy Australia Carry?
You can click the graphic below for the historical numbers, but it shows that as of June 2025 Beetaloo Energy Australia had AU$15.4m of debt, an increase on AU$1.83m, over one year. However, it does have AU$39.3m in cash offsetting this, leading to net cash of AU$23.9m.
A Look At Beetaloo Energy Australia's Liabilities
We can see from the most recent balance sheet that Beetaloo Energy Australia had liabilities of AU$24.8m falling due within a year, and liabilities of AU$4.46m due beyond that. On the other hand, it had cash of AU$39.3m and AU$918.0k worth of receivables due within a year. So it can boast AU$10.9m more liquid assets than total liabilities.
This short term liquidity is a sign that Beetaloo Energy Australia could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that Beetaloo Energy Australia has more cash than debt is arguably a good indication that it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Beetaloo Energy Australia's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.
View our latest analysis for Beetaloo Energy Australia
Given its lack of meaningful operating revenue, Beetaloo Energy Australia shareholders no doubt hope it can fund itself until it can sell some combustibles.
So How Risky Is Beetaloo Energy Australia?
Statistically speaking companies that lose money are riskier than those that make money. And we do note that Beetaloo Energy Australia had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of AU$66m and booked a AU$21m accounting loss. With only AU$23.9m on the balance sheet, it would appear that its going to need to raise capital again soon. Overall, its balance sheet doesn't seem overly risky, at the moment, but we're always cautious until we see the positive free cash flow. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 4 warning signs for Beetaloo Energy Australia (1 can't be ignored) you should be aware of.
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.
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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.