These 4 Measures Indicate That HASS (KOSDAQ:450330) Is Using Debt Reasonably Well

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. Importantly, HASS Corp. (KOSDAQ:450330) does carry debt. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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.

How Much Debt Does HASS Carry?

The image below, which you can click on for greater detail, shows that HASS had debt of ₩6.80b at the end of June 2025, a reduction from ₩12.7b over a year. But it also has ₩13.8b in cash to offset that, meaning it has ₩6.95b net cash.

How Healthy Is HASS' Balance Sheet?

The latest balance sheet data shows that HASS had liabilities of ₩7.03b due within a year, and liabilities of ₩2.03b falling due after that. Offsetting these obligations, it had cash of ₩13.8b as well as receivables valued at ₩3.37b due within 12 months. So it can boast ₩8.06b more liquid assets than total liabilities.

This surplus suggests that HASS has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, HASS boasts net cash, so it's fair to say it does not have a heavy debt load!

See our latest analysis for HASS

The modesty of its debt load may become crucial for HASS if management cannot prevent a repeat of the 58% cut to EBIT over the last year. When it comes to paying off debt, falling earnings are no more useful than sugary sodas are for your health. The balance sheet is clearly the area to focus on when you are analysing debt. But it is HASS's earnings that will influence how the balance sheet holds up in the future. 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.

Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. While HASS has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Over the last three years, HASS saw substantial negative free cash flow, in total. While that may be a result of expenditure for growth, it does make the debt far more risky.

Summing Up

While it is always sensible to investigate a company's debt, in this case HASS has ₩6.95b in net cash and a decent-looking balance sheet. So we are not troubled with HASS's debt use. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should learn about the 3 warning signs we've spotted with HASS (including 1 which can'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.