Is TaesungLtd (KOSDAQ:323280) Weighed On By Its Debt Load?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' 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. Importantly, Taesung Co.,Ltd. (KOSDAQ:323280) does carry debt. But the more important question is: how much risk is that debt creating?

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When Is Debt A Problem?

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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is TaesungLtd's Net Debt?

As you can see below, at the end of September 2025, TaesungLtd had ₩19.7b of debt, up from ₩7.20b a year ago. Click the image for more detail. But it also has ₩63.6b in cash to offset that, meaning it has ₩43.9b net cash.

A Look At TaesungLtd's Liabilities

The latest balance sheet data shows that TaesungLtd had liabilities of ₩19.3b due within a year, and liabilities of ₩16.4b falling due after that. Offsetting this, it had ₩63.6b in cash and ₩6.80b in receivables that were due within 12 months. So it actually has ₩34.7b more liquid assets than total liabilities.

This short term liquidity is a sign that TaesungLtd could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, TaesungLtd boasts net cash, so it's fair to say it does not have a heavy debt load! There's no doubt that we learn most about debt from the balance sheet. But it is TaesungLtd's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

See our latest analysis for TaesungLtd

Over 12 months, TaesungLtd made a loss at the EBIT level, and saw its revenue drop to ₩39b, which is a fall of 26%. To be frank that doesn't bode well.

So How Risky Is TaesungLtd?

Statistically speaking companies that lose money are riskier than those that make money. And we do note that TaesungLtd had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of ₩47b and booked a ₩1.9b accounting loss. Given it only has net cash of ₩43.9b, the company may need to raise more capital if it doesn't reach break-even soon. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For example, we've discovered 3 warning signs for TaesungLtd (1 is potentially serious!) that you should be aware of before investing here.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.