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    KESPION (KOSDAQ:079190) Has Debt But No Earnings; Should You Worry?

    Simply Wall St·01/02/2026 22:29:39
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    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. We note that KESPION Co., Ltd. (KOSDAQ:079190) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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    What Risk Does Debt Bring?

    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, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

    How Much Debt Does KESPION Carry?

    You can click the graphic below for the historical numbers, but it shows that KESPION had ₩3.32b of debt in September 2025, down from ₩4.52b, one year before. However, its balance sheet shows it holds ₩8.79b in cash, so it actually has ₩5.47b net cash.

    debt-equity-history-analysis
    KOSDAQ:A079190 Debt to Equity History January 2nd 2026

    A Look At KESPION's Liabilities

    The latest balance sheet data shows that KESPION had liabilities of ₩12.4b due within a year, and liabilities of ₩1.87b falling due after that. Offsetting this, it had ₩8.79b in cash and ₩5.38b in receivables that were due within 12 months. So these liquid assets roughly match the total liabilities.

    This state of affairs indicates that KESPION's balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So while it's hard to imagine that the ₩18.2b company is struggling for cash, we still think it's worth monitoring its balance sheet. Despite its noteworthy liabilities, KESPION 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 you can't view debt in total isolation; since KESPION will need earnings to service that debt. 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.

    View our latest analysis for KESPION

    Over 12 months, KESPION reported revenue of ₩41b, which is a gain of 18%, although it did not report any earnings before interest and tax. We usually like to see faster growth from unprofitable companies, but each to their own.

    So How Risky Is KESPION?

    We have no doubt that loss making companies are, in general, riskier than profitable ones. And the fact is that over the last twelve months KESPION lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of ₩3.4b and booked a ₩1.6b accounting loss. However, it has net cash of ₩5.47b, so it has a bit of time before it will need more capital. Summing up, we're a little skeptical of this one, as it seems fairly risky in the absence of free cashflow. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. For example - KESPION has 2 warning signs we think you should be aware of.

    If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.