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 might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that GemPharmatech Co., Ltd. (SHSE:688046) does use debt in its business. But should shareholders be worried about its use of debt?

Why Does Debt Bring Risk?

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