Doosan Fuel Cell (KRX:336260) Is Carrying A Fair Bit Of Debt

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 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, Doosan Fuel Cell Co., Ltd. (KRX:336260) does carry debt. But the more important question is: how much risk is that debt creating?

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Why Does Debt Bring Risk?

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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. 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. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Doosan Fuel Cell's Net Debt?

The chart below, which you can click on for greater detail, shows that Doosan Fuel Cell had ₩438.2b in debt in June 2025; about the same as the year before. On the flip side, it has ₩63.0b in cash leading to net debt of about ₩375.2b.

A Look At Doosan Fuel Cell's Liabilities

The latest balance sheet data shows that Doosan Fuel Cell had liabilities of ₩429.5b due within a year, and liabilities of ₩317.6b falling due after that. Offsetting this, it had ₩63.0b in cash and ₩117.5b in receivables that were due within 12 months. So it has liabilities totalling ₩566.6b more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since Doosan Fuel Cell has a market capitalization of ₩1.94t, and so it could probably strengthen its balance sheet by raising capital if it needed to. But we definitely want to keep our eyes open to indications that its debt is bringing too much risk. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Doosan Fuel Cell can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Check out our latest analysis for Doosan Fuel Cell

In the last year Doosan Fuel Cell wasn't profitable at an EBIT level, but managed to grow its revenue by 86%, to ₩522b. Shareholders probably have their fingers crossed that it can grow its way to profits.

Caveat Emptor

Even though Doosan Fuel Cell managed to grow its top line quite deftly, the cold hard truth is that it is losing money on the EBIT line. Indeed, it lost ₩14b at the EBIT level. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. We would feel better if it turned its trailing twelve month loss of ₩18b into a profit. So we do think this stock is quite risky. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 1 warning sign for Doosan Fuel Cell you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.