Is IvisionworksLtd (KOSDAQ:469750) Using Debt Sensibly?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We note that Ivisionworks Co.,Ltd. (KOSDAQ:469750) does have debt on its balance sheet. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. 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.

What Is IvisionworksLtd's Net Debt?

As you can see below, IvisionworksLtd had ₩9.36b of debt, at June 2025, which is about the same as the year before. You can click the chart for greater detail. However, it does have ₩18.0b in cash offsetting this, leading to net cash of ₩8.66b.

A Look At IvisionworksLtd's Liabilities

We can see from the most recent balance sheet that IvisionworksLtd had liabilities of ₩12.2b falling due within a year, and liabilities of ₩2.59b due beyond that. On the other hand, it had cash of ₩18.0b and ₩2.64b worth of receivables due within a year. So it can boast ₩5.87b more liquid assets than total liabilities.

This surplus suggests that IvisionworksLtd has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Simply put, the fact that IvisionworksLtd has more cash than debt is arguably a good indication that it can manage its debt safely. There's no doubt that we learn most about debt from the balance sheet. But it is IvisionworksLtd's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

See our latest analysis for IvisionworksLtd

Over 12 months, IvisionworksLtd made a loss at the EBIT level, and saw its revenue drop to ₩25b, which is a fall of 22%. That makes us nervous, to say the least.

So How Risky Is IvisionworksLtd?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And the fact is that over the last twelve months IvisionworksLtd lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of ₩7.8b and booked a ₩8.6b accounting loss. However, it has net cash of ₩8.66b, so it has a bit of time before it will need more capital. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. 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. To that end, you should learn about the 4 warning signs we've spotted with IvisionworksLtd (including 2 which make us uncomfortable) .

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.