Here's Why C-SITE (KOSDAQ:109670) Can Afford Some 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, C-SITE Co., Ltd. (KOSDAQ:109670) does carry debt. But the real question is whether this debt is making the company risky.

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When Is Debt Dangerous?

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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.

What Is C-SITE's Debt?

As you can see below, C-SITE had ₩21.5b of debt at June 2025, down from ₩26.5b a year prior. However, it also had ₩17.1b in cash, and so its net debt is ₩4.42b.

A Look At C-SITE's Liabilities

According to the last reported balance sheet, C-SITE had liabilities of ₩41.8b due within 12 months, and liabilities of ₩5.30b due beyond 12 months. Offsetting these obligations, it had cash of ₩17.1b as well as receivables valued at ₩31.3b due within 12 months. So it actually has ₩1.28b more liquid assets than total liabilities.

This surplus suggests that C-SITE has a conservative balance sheet, and could probably eliminate its debt without much difficulty. The balance sheet is clearly the area to focus on when you are analysing debt. But you can't view debt in total isolation; since C-SITE will need earnings to service that debt. 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.

Check out our latest analysis for C-SITE

In the last year C-SITE wasn't profitable at an EBIT level, but managed to grow its revenue by 5.2%, to ₩171b. That rate of growth is a bit slow for our taste, but it takes all types to make a world.

Caveat Emptor

Importantly, C-SITE had an earnings before interest and tax (EBIT) loss over the last year. To be specific the EBIT loss came in at ₩16m. On a more positive note, the company does have liquid assets, so it has a bit of time to improve its operations before the debt becomes an acute problem. But a profit would do more to inspire us to research the business more closely. So it seems too risky for our taste. 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 example C-SITE has 3 warning signs (and 1 which is significant) we think you should know about.

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.