JNK GlobalLtd (KOSDAQ:126880) Has A Rock Solid Balance Sheet

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 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. Importantly, JNK Global Co.,Ltd. (KOSDAQ:126880) does carry debt. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

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. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is JNK GlobalLtd's Debt?

You can click the graphic below for the historical numbers, but it shows that JNK GlobalLtd had ₩43.5b of debt in June 2025, down from ₩72.6b, one year before. However, it does have ₩80.3b in cash offsetting this, leading to net cash of ₩36.8b.

A Look At JNK GlobalLtd's Liabilities

Zooming in on the latest balance sheet data, we can see that JNK GlobalLtd had liabilities of ₩94.6b due within 12 months and liabilities of ₩6.40b due beyond that. Offsetting this, it had ₩80.3b in cash and ₩17.7b in receivables that were due within 12 months. So its liabilities total ₩3.03b more than the combination of its cash and short-term receivables.

Given JNK GlobalLtd has a market capitalization of ₩111.9b, 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, JNK GlobalLtd boasts net cash, so it's fair to say it does not have a heavy debt load!

Check out our latest analysis for JNK GlobalLtd

In addition to that, we're happy to report that JNK GlobalLtd has boosted its EBIT by 59%, thus reducing the spectre of future debt repayments. There's no doubt that we learn most about debt from the balance sheet. But it is JNK GlobalLtd'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.

Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. While JNK GlobalLtd has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Happily for any shareholders, JNK GlobalLtd actually produced more free cash flow than EBIT over the last three years. That sort of strong cash conversion gets us as excited as the crowd when the beat drops at a Daft Punk concert.

Summing Up

While it is always sensible to look at a company's total liabilities, it is very reassuring that JNK GlobalLtd has ₩36.8b in net cash. The cherry on top was that in converted 261% of that EBIT to free cash flow, bringing in -₩3.4b. So we don't think JNK GlobalLtd's use of debt is risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 4 warning signs for JNK GlobalLtd that you should be aware of before investing here.

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.