Is HASS (KOSDAQ:450330) Using Too Much Debt?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' 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. We note that HASS Corp. (KOSDAQ:450330) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?

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Why Does Debt Bring Risk?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. 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.

How Much Debt Does HASS Carry?

As you can see below, HASS had ₩7.42b of debt at March 2025, down from ₩12.2b a year prior. However, it does have ₩15.5b in cash offsetting this, leading to net cash of ₩8.04b.

How Healthy Is HASS' Balance Sheet?

Zooming in on the latest balance sheet data, we can see that HASS had liabilities of ₩7.97b due within 12 months and liabilities of ₩2.41b due beyond that. Offsetting these obligations, it had cash of ₩15.5b as well as receivables valued at ₩2.23b due within 12 months. So it actually has ₩7.32b more liquid assets than total liabilities.

This short term liquidity is a sign that HASS could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that HASS has more cash than debt is arguably a good indication that it can manage its debt safely. 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 HASS 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.

See our latest analysis for HASS

In the last year HASS had a loss before interest and tax, and actually shrunk its revenue by 3.6%, to ₩15b. That's not what we would hope to see.

So How Risky Is HASS?

Although HASS had an earnings before interest and tax (EBIT) loss over the last twelve months, it made a statutory profit of ₩383m. So taking that on face value, and considering the cash, we don't think its very risky in the near term. We'll feel more comfortable with the stock once EBIT is positive, given the lacklustre revenue growth. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. For example HASS has 4 warning signs (and 1 which is a bit concerning) we think you should know about.

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.