<div id="readability-page-1"><div><p>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 seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is.  We can see that <strong>CVR Energy, Inc.</strong> (NYSE:CVI) does use debt in its business.  But the real question is whether this debt is making the company risky.</p><p>AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.</p><h2> When Is Debt Dangerous? </h2><p> Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow.  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.  When we think about a company's use of debt, we first look at cash and debt together. </p> <h2> What Is CVR Energy's Net Debt? </h2><p> The image below, which you can click on for greater detail, shows that at September 2025 CVR Energy had debt of US$1.77b, up from US$1.54b in one year.    On the flip side, it has US$670.0m in cash leading to net debt of about US$1.10b.  </p><figure><img height="1052" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/5092377-debt-equity-history-analysis-1-dark-2/1765550316937?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="1642" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/5092377-debt-equity-history-analysis-1-dark-2/1765550316937"/><figcaption>NYSE:CVI Debt to Equity History December 12th 2025</figcaption></figure><h2> How Healthy Is CVR Energy's Balance Sheet? </h2><p> We can see from the most recent balance sheet that CVR Energy had liabilities of US$755.0m falling due within a year, and liabilities of US$2.20b due beyond that.   Offsetting this, it had US$670.0m in cash and US$253.0m in receivables that were due within 12 months.   So its liabilities total US$2.03b more than the combination of its cash and short-term receivables.  </p><p> This is a mountain of leverage  relative to its  market capitalization of US$3.19b.  Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution.  </p><p><span> Check out our latest analysis for CVR Energy </span></p> <p> We use two main ratios to inform us about debt levels relative to earnings. The first is net debt divided by earnings before interest, tax, depreciation, and amortization (EBITDA), while the second is how many times its earnings before interest and tax (EBIT) covers its interest expense (or its interest cover, for short).  This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it. </p> <p> CVR Energy's net debt is sitting at a very reasonable 1.7 times its EBITDA, while its EBIT covered its interest expense just 3.0 times last year.   In large part that's due to the company's significant depreciation and amortisation charges, which arguably mean its EBITDA is a very generous measure of earnings, and its debt may be more of a burden than it first appears.         It is well worth noting that CVR Energy's EBIT shot up like bamboo after rain, gaining 86% in the last twelve months. That'll make it easier to manage its debt.      The balance sheet is clearly the area to focus on when you are analysing debt.  But it is future earnings, more than anything, that will determine CVR Energy'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.  </p><p> Finally, a company can only pay off debt with cold hard cash, not accounting profits.   So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow.    In the last three years, CVR Energy's free cash flow amounted to 42% of its EBIT, less than we'd expect.  That's not great, when it comes to paying down debt.   </p> <h2>Our View</h2><p> On our analysis CVR Energy's EBIT growth rate should signal that it won't have too much trouble with its debt.  But the other factors we noted above weren't so encouraging.   For instance it seems like it has to struggle a bit to cover its interest expense with its EBIT.       Looking at all this data makes us feel a little cautious about CVR Energy's debt levels.  While we appreciate debt can enhance returns on equity, we'd suggest that shareholders keep close watch on its debt levels, lest they increase.    The balance sheet is clearly the area to focus on when you are analysing debt.  However, not all investment risk resides within the balance sheet - far from it.   For instance, we've identified  <strong> 2 warning signs for CVR Energy</strong>  that you should be aware of.   </p> <p> If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this <strong>free</strong> list of growing businesses that have net cash on the balance sheet. </p><div><p>Mobile Infrastructure for Defense and Disaster</p><p>The next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.</p><p>Get the investor briefing before the next round of contracts</p><p><span>Sponsored On Behalf of CiTech</span></p></div></div></div>

<p>The analysis of CVR Energy (NYSE:CVI) highlights concerns about its debt levels, which are significant compared to its market capitalization. While its EBIT growth rate is promising, the company's ability to cover interest expenses and generate free cash flow is less encouraging. Investors are advised to monitor CVR Energy's debt closely, as it could impact shareholder returns.</p>

Is CVR Energy (NYSE:CVI) A Risky Investment?