Is MOTIVELINKltd (KOSDAQ:463480) A Risky Investment?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' 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 note that MOTIVELINK co.,ltd (KOSDAQ:463480) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?

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When Is Debt Dangerous?

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. 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. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is MOTIVELINKltd's Debt?

The chart below, which you can click on for greater detail, shows that MOTIVELINKltd had ₩13.5b in debt in June 2025; about the same as the year before. However, its balance sheet shows it holds ₩19.5b in cash, so it actually has ₩6.02b net cash.

How Healthy Is MOTIVELINKltd's Balance Sheet?

We can see from the most recent balance sheet that MOTIVELINKltd had liabilities of ₩21.4b falling due within a year, and liabilities of ₩8.09b due beyond that. Offsetting these obligations, it had cash of ₩19.5b as well as receivables valued at ₩7.72b due within 12 months. So it has liabilities totalling ₩2.30b more than its cash and near-term receivables, combined.

Given MOTIVELINKltd has a market capitalization of ₩111.8b, it's hard to believe these liabilities pose much threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. While it does have liabilities worth noting, MOTIVELINKltd also has more cash than debt, so we're pretty confident it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since MOTIVELINKltd will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View our latest analysis for MOTIVELINKltd

In the last year MOTIVELINKltd had a loss before interest and tax, and actually shrunk its revenue by 16%, to ₩62b. That's not what we would hope to see.

So How Risky Is MOTIVELINKltd?

Although MOTIVELINKltd had an earnings before interest and tax (EBIT) loss over the last twelve months, it made a statutory profit of ₩389m. So when you consider it has net cash, along with the statutory profit, the stock probably isn't as risky as it might seem, at least in the short term. Until we see some positive EBIT, we're a bit cautious of the stock, not least because of the rather modest revenue growth. 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. We've identified 5 warning signs with MOTIVELINKltd (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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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.