These 4 Measures Indicate That HanJung Natural Connectivity System.co.Ltd (KOSDAQ:107640) Is Using Debt Reasonably Well

Warren Buffett famously said, '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. As with many other companies HanJung Natural Connectivity System.co.,Ltd (KOSDAQ:107640) makes use of debt. But the real question is whether this debt is making the company risky.

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Why Does Debt Bring Risk?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together.

What Is HanJung Natural Connectivity System.co.Ltd's Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 HanJung Natural Connectivity System.co.Ltd had ₩69.6b of debt, an increase on ₩53.0b, over one year. However, its balance sheet shows it holds ₩75.3b in cash, so it actually has ₩5.71b net cash.

How Healthy Is HanJung Natural Connectivity System.co.Ltd's Balance Sheet?

According to the last reported balance sheet, HanJung Natural Connectivity System.co.Ltd had liabilities of ₩87.8b due within 12 months, and liabilities of ₩42.0b due beyond 12 months. Offsetting this, it had ₩75.3b in cash and ₩15.5b in receivables that were due within 12 months. So its liabilities total ₩39.0b more than the combination of its cash and short-term receivables.

Given HanJung Natural Connectivity System.co.Ltd has a market capitalization of ₩439.6b, it's hard to believe these liabilities pose much threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. Despite its noteworthy liabilities, HanJung Natural Connectivity System.co.Ltd boasts net cash, so it's fair to say it does not have a heavy debt load!

Check out our latest analysis for HanJung Natural Connectivity System.co.Ltd

Notably, HanJung Natural Connectivity System.co.Ltd's EBIT launched higher than Elon Musk, gaining a whopping 789% on last year. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if HanJung Natural Connectivity System.co.Ltd can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash. HanJung Natural Connectivity System.co.Ltd may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. During the last two years, HanJung Natural Connectivity System.co.Ltd burned a lot of cash. While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.

Summing Up

We could understand if investors are concerned about HanJung Natural Connectivity System.co.Ltd's liabilities, but we can be reassured by the fact it has has net cash of ₩5.71b. And it impressed us with its EBIT growth of 789% over the last year. So we are not troubled with HanJung Natural Connectivity System.co.Ltd's debt use. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we've identified 3 warning signs for HanJung Natural Connectivity System.co.Ltd (2 are a bit concerning) you should be aware of.

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.