Is Hyulim ROBOTLtd (KOSDAQ:090710) Weighed On By Its Debt Load?

Warren Buffett famously said, '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 can see that Hyulim ROBOT Co.,Ltd. (KOSDAQ:090710) does use debt in its business. But should shareholders be worried about its use of debt?

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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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Hyulim ROBOTLtd Carry?

The image below, which you can click on for greater detail, shows that at June 2025 Hyulim ROBOTLtd had debt of ₩42.8b, up from ₩8.25b in one year. But on the other hand it also has ₩51.1b in cash, leading to a ₩8.27b net cash position.

How Healthy Is Hyulim ROBOTLtd's Balance Sheet?

We can see from the most recent balance sheet that Hyulim ROBOTLtd had liabilities of ₩101.9b falling due within a year, and liabilities of ₩4.81b due beyond that. Offsetting these obligations, it had cash of ₩51.1b as well as receivables valued at ₩78.5b due within 12 months. So it actually has ₩22.9b more liquid assets than total liabilities.

This short term liquidity is a sign that Hyulim ROBOTLtd could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that Hyulim ROBOTLtd has more cash than debt is arguably a good indication that it can manage its debt safely. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Hyulim ROBOTLtd 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 Hyulim ROBOTLtd

In the last year Hyulim ROBOTLtd wasn't profitable at an EBIT level, but managed to grow its revenue by 114%, to ₩194b. So there's no doubt that shareholders are cheering for growth

So How Risky Is Hyulim ROBOTLtd?

Although Hyulim ROBOTLtd had an earnings before interest and tax (EBIT) loss over the last twelve months, it made a statutory profit of ₩15b. So taking that on face value, and considering the cash, we don't think its very risky in the near term. Keeping in mind its 114% revenue growth over the last year, we think there's a decent chance the company is on track. There's no doubt fast top line growth can cure all manner of ills, for a stock. 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. These risks can be hard to spot. Every company has them, and we've spotted 2 warning signs for Hyulim ROBOTLtd (of which 1 shouldn't be ignored!) you should know about.

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.

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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.