Does NoulLtd (KOSDAQ:376930) Have A Healthy Balance Sheet?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' 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 Noul Co.,Ltd. (KOSDAQ:376930) does have debt on its balance sheet. But the real question is whether this debt is making the company risky.

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When Is Debt A Problem?

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. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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, debt can be an important tool in businesses, particularly capital heavy businesses. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is NoulLtd's Debt?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 NoulLtd had ₩5.94b of debt, an increase on ₩1.20b, over one year. But it also has ₩15.3b in cash to offset that, meaning it has ₩9.32b net cash.

How Strong Is NoulLtd's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that NoulLtd had liabilities of ₩8.81b due within 12 months and liabilities of ₩8.99b due beyond that. Offsetting these obligations, it had cash of ₩15.3b as well as receivables valued at ₩4.24b due within 12 months. So it can boast ₩1.71b more liquid assets than total liabilities.

This short term liquidity is a sign that NoulLtd could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that NoulLtd has more cash than debt is arguably a good indication that it can manage its debt safely. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since NoulLtd 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 NoulLtd

Over 12 months, NoulLtd reported revenue of ₩3.0b, which is a gain of 31%, although it did not report any earnings before interest and tax. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is NoulLtd?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And we do note that NoulLtd had an earnings before interest and tax (EBIT) loss, over the last year. And over the same period it saw negative free cash outflow of ₩22b and booked a ₩23b accounting loss. With only ₩9.32b on the balance sheet, it would appear that its going to need to raise capital again soon. With very solid revenue growth in the last year, NoulLtd may be on a path to profitability. Pre-profit companies are often risky, but they can also offer great rewards. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 4 warning signs for NoulLtd you should be aware of, and 2 of them shouldn't be ignored.

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.