Does Wonik Pne (KOSDAQ:217820) Have A Healthy Balance Sheet?

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. We note that Wonik Pne Co., Ltd. (KOSDAQ:217820) does have debt on its balance sheet. But is this debt a concern to shareholders?

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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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is Wonik Pne's Debt?

The image below, which you can click on for greater detail, shows that Wonik Pne had debt of ₩113.2b at the end of June 2025, a reduction from ₩162.4b over a year. However, because it has a cash reserve of ₩17.7b, its net debt is less, at about ₩95.5b.

How Strong Is Wonik Pne's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Wonik Pne had liabilities of ₩274.0b due within 12 months and liabilities of ₩3.06b due beyond that. Offsetting these obligations, it had cash of ₩17.7b as well as receivables valued at ₩28.7b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by ₩230.6b.

This deficit casts a shadow over the ₩137.8b company, like a colossus towering over mere mortals. So we definitely think shareholders need to watch this one closely. After all, Wonik Pne 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 Wonik Pne'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 Wonik Pne

Over 12 months, Wonik Pne reported revenue of ₩420b, which is a gain of 19%, although it did not report any earnings before interest and tax. We usually like to see faster growth from unprofitable companies, but each to their own.

Caveat Emptor

Over the last twelve months Wonik Pne produced an earnings before interest and tax (EBIT) loss. Indeed, it lost ₩229m at the EBIT level. When we look at that alongside the significant liabilities, we're not particularly confident about the company. We'd want to see some strong near-term improvements before getting too interested in the stock. It's fair to say the loss of ₩14b didn't encourage us either; we'd like to see a profit. And until that time we think this is a risky stock. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 2 warning signs for Wonik Pne (1 is a bit concerning) you should be aware of.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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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.