Does ILSEUNG (KOSDAQ:333430) Have A Healthy 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.' 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. As with many other companies ILSEUNG Co., Ltd. (KOSDAQ:333430) makes use of debt. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. 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 ILSEUNG's Debt?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 ILSEUNG had ₩26.2b of debt, an increase on ₩24.9b, over one year. But on the other hand it also has ₩30.6b in cash, leading to a ₩4.39b net cash position.

How Strong Is ILSEUNG's Balance Sheet?

We can see from the most recent balance sheet that ILSEUNG had liabilities of ₩8.38b falling due within a year, and liabilities of ₩28.2b due beyond that. Offsetting these obligations, it had cash of ₩30.6b as well as receivables valued at ₩10.0b due within 12 months. So it can boast ₩4.06b more liquid assets than total liabilities.

This surplus suggests that ILSEUNG has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, ILSEUNG boasts net cash, so it's fair to say it does not have a heavy debt load!

Check out our latest analysis for ILSEUNG

In addition to that, we're happy to report that ILSEUNG has boosted its EBIT by 63%, thus reducing the spectre of future debt repayments. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since ILSEUNG 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.

Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. While ILSEUNG 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. Over the last three years, ILSEUNG recorded free cash flow worth a fulsome 99% of its EBIT, which is stronger than we'd usually expect. That positions it well to pay down debt if desirable to do so.

Summing Up

While we empathize with investors who find debt concerning, you should keep in mind that ILSEUNG has net cash of ₩4.39b, as well as more liquid assets than liabilities. And it impressed us with free cash flow of ₩4.0b, being 99% of its EBIT. So is ILSEUNG's debt a risk? It doesn't seem so to us. 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. To that end, you should be aware of the 2 warning signs we've spotted with ILSEUNG .

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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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.