Does Automobile & PCB (KRX:015260) Have A Healthy Balance Sheet?

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.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We note that Automobile & PCB Inc. (KRX:015260) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?

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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. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is Automobile & PCB's Net Debt?

You can click the graphic below for the historical numbers, but it shows that Automobile & PCB had ₩32.4b of debt in September 2025, down from ₩38.4b, one year before. However, because it has a cash reserve of ₩1.95b, its net debt is less, at about ₩30.4b.

How Strong Is Automobile & PCB's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Automobile & PCB had liabilities of ₩66.0b due within 12 months and liabilities of ₩5.04b due beyond that. Offsetting this, it had ₩1.95b in cash and ₩16.3b in receivables that were due within 12 months. So it has liabilities totalling ₩52.8b more than its cash and near-term receivables, combined.

The deficiency here weighs heavily on the ₩19.7b company itself, as if a child were struggling under the weight of an enormous back-pack full of books, his sports gear, and a trumpet. So we'd watch its balance sheet closely, without a doubt. After all, Automobile & PCB would likely require a major re-capitalisation if it had to pay its creditors today. When analysing debt levels, the balance sheet is the obvious place to start. But it is Automobile & PCB'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 Automobile & PCB

In the last year Automobile & PCB wasn't profitable at an EBIT level, but managed to grow its revenue by 6.9%, to ₩121b. That rate of growth is a bit slow for our taste, but it takes all types to make a world.

Caveat Emptor

Over the last twelve months Automobile & PCB produced an earnings before interest and tax (EBIT) loss. Its EBIT loss was a whopping ₩6.1b. Combining this information with the significant liabilities we already touched on makes us very hesitant about this stock, to say the least. That said, it is possible that the company will turn its fortunes around. Nevertheless, we would not bet on it given that it lost ₩10b in just last twelve months, and it doesn't have much by way of liquid assets. So we think this stock is quite risky. We'd prefer to pass. 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. These risks can be hard to spot. Every company has them, and we've spotted 2 warning signs for Automobile & PCB you should know about.

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.