---
title: "Here's Why CSL (ASX:CSL) Can Manage Its Debt Responsibly"
description: "CSL Limited (ASX:CSL) carries US$10.4 billion in debt, with a net debt of US$8.84 billion after accounting for US$1.52 billion in cash. Its liabilities total US$12.7 billion, but with a market value o"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/244558315.md"
published_at: "2025-06-14T22:46:01.000Z"
---

# Here's Why CSL (ASX:CSL) Can Manage Its Debt Responsibly

> CSL Limited (ASX:CSL) carries US$10.4 billion in debt, with a net debt of US$8.84 billion after accounting for US$1.52 billion in cash. Its liabilities total US$12.7 billion, but with a market value of US$75.1 billion, this is not seen as a major threat. CSL's net debt to EBITDA ratio is 1.8, indicating responsible debt management, while its EBIT covers interest expenses 9.5 times. However, CSL's free cash flow is only 34% of EBIT, suggesting challenges in cash conversion. Overall, CSL is managing its debt well but should be monitored closely.

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. Importantly, **CSL Limited** (ASX:CSL) does carry debt. But the more important question is: how much risk is that debt creating?

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

## Why Does Debt Bring Risk?

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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. 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 CSL Carry?

The chart below, which you can click on for greater detail, shows that CSL had US$10.4b in debt in December 2024; about the same as the year before. However, it also had US$1.52b in cash, and so its net debt is US$8.84b.

## How Healthy Is CSL's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that CSL had liabilities of US$6.07b due within 12 months and liabilities of US$11.8b due beyond that. Offsetting this, it had US$1.52b in cash and US$3.65b in receivables that were due within 12 months. So it has liabilities totalling US$12.7b more than its cash and near-term receivables, combined.

Since publicly traded CSL shares are worth a very impressive total of US$75.1b, it seems unlikely that this level of liabilities would be a major threat. However, we do think it is worth keeping an eye on its balance sheet strength, as it may change over time.

View our latest analysis for CSL

In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.

CSL's net debt of 1.8 times EBITDA suggests graceful use of debt. And the fact that its trailing twelve months of EBIT was 9.5 times its interest expenses harmonizes with that theme. CSL grew its EBIT by 3.9% in the last year. Whilst that hardly knocks our socks off it is a positive when it comes to debt. 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 CSL's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this **free** report showing analyst profit forecasts.

But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. So it's worth checking how much of that EBIT is backed by free cash flow. Looking at the most recent three years, CSL recorded free cash flow of 34% of its EBIT, which is weaker than we'd expect. That weak cash conversion makes it more difficult to handle indebtedness.

## Our View

When it comes to the balance sheet, the standout positive for CSL was the fact that it seems able to cover its interest expense with its EBIT confidently. But the other factors we noted above weren't so encouraging. For instance it seems like it has to struggle a bit to convert EBIT to free cash flow. When we consider all the elements mentioned above, it seems to us that CSL is managing its debt quite well. But a word of caution: we think debt levels are high enough to justify ongoing monitoring. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. Be aware that CSL is showing **1 warning sign in our investment analysis** , you should know about...

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this **free** list of growing businesses that have net cash on the balance sheet.

### Related Stocks

- [CSL.AU - CSL Limited](https://longbridge.com/en/quote/CSL.AU.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| Memo Therapeutics AG 與 CSL 達成合作與選擇協議，共同開發重組多克隆 IgG 技術 | CSL 有限公司：MEMO THERAPEUTICS AG 與 CSL 簽署合作與選擇協議，以開發重組多克隆 IgG 技術。MEMO THERAPEUTICS AG：協議包括探索性工作的研究與開發資金、技術訪問。MEMO THERAPEUT | [Link](https://longbridge.com/en/news/275315643.md) |
| CSL 報告近 60,000 個附條件權利的失效 | CSL Limited 宣佈，由於未滿足績效條件，59,992 個有條件權利已於 2026 年 2 月 4 日失效。此次失效略微減少了股權激勵安排下未來潛在的股份發行，表明特定的績效門檻未能達成。目前，分析師對 CSL 股票的評級為持有，目 | [Link](https://longbridge.com/en/news/275066076.md) |
| 彭博新聞報道，康菲石油正在考慮出售其價值 20 億美元的二疊紀資產 | 2 月 20 日（路透社）- 據彭博新聞週五報道，康菲石油正在探索出售其部分二疊紀盆地資產，這是其更廣泛的投資組合精簡的一部分，消息人士透露。這些資產是通過與 Concho Resources 和 Shell（SHEL.L）的交易在多年中收 | [Link](https://longbridge.com/en/news/276478732.md) |
| 谷歌突然發佈 Gemini 3.1 Pro：核心推理性能直接翻倍 | 谷歌發佈了最新的大模型 Gemini 3.1 Pro，其推理性能較去年發佈的 Gemini 3 Pro 翻倍。在 ARC-AGI-2 評測中，Gemini 3.1 Pro 得分 77.1%，顯示出強大的推理能力。新模型支持多源數據綜合和複雜 | [Link](https://longbridge.com/en/news/276396515.md) |
| 沃爾瑪四季度財報超預期但盈利指引不及預期，CEO 稱 “美國低收入家庭只能勉強維持生計” | 沃爾瑪 Q4 營收超預期，新財年盈利指引（每股 2.75-2.85 美元）遠低於市場預期的 2.96 美元，顯示通脹壓力下消費者支出不確定性猶存，拖累股價下跌 1.38%。財報印證 K 型” 分化：高收入家庭驅動增長，低收入羣體 “錢包吃緊 | [Link](https://longbridge.com/en/news/276398633.md) |

---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.