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.’ 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. Importantly, Shandong Molong Petroleum Machinery Company Limited (HKG:568) does carry debt. But is this debt a concern to shareholders?

When Is Debt Dangerous?

Debt is a…