Naspers (JSE:NPN) Could Easily Take On More Debt

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Naspers Limited (JSE:NPN) makes use of debt. But the real question is whether this debt is making the company risky.

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Why Does Debt Bring Risk?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. 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. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Naspers's Net Debt?

As you can see below, at the end of September 2025, Naspers had US$17.9b of debt, up from US$16.7b a year ago. Click the image for more detail. But on the other hand it also has US$22.3b in cash, leading to a US$4.45b net cash position.

How Strong Is Naspers' Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Naspers had liabilities of US$7.03b due within 12 months and liabilities of US$17.5b due beyond that. Offsetting these obligations, it had cash of US$22.3b as well as receivables valued at US$2.76b due within 12 months. So it actually has US$551.0m more liquid assets than total liabilities.

This state of affairs indicates that Naspers' balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So it's very unlikely that the US$51.0b company is short on cash, but still worth keeping an eye on the balance sheet. Succinctly put, Naspers boasts net cash, so it's fair to say it does not have a heavy debt load!

See our latest analysis for Naspers

Although Naspers made a loss at the EBIT level, last year, it was also good to see that it generated US$217m in EBIT over the last twelve months. 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 Naspers 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.

But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. While Naspers 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. Happily for any shareholders, Naspers actually produced more free cash flow than EBIT over the last year. That sort of strong cash conversion gets us as excited as the crowd when the beat drops at a Daft Punk concert.

Summing Up

While it is always sensible to investigate a company's debt, in this case Naspers has US$4.45b in net cash and a decent-looking balance sheet. And it impressed us with free cash flow of US$1.8b, being 841% of its EBIT. So we don't think Naspers's use of debt is risky. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For example - Naspers has 1 warning sign we think you should be aware of.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.