Does Hyundai Bioscience (KOSDAQ:048410) Have A Healthy Balance Sheet?

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.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We note that Hyundai Bioscience Co., Ltd. (KOSDAQ:048410) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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What Risk Does Debt Bring?

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. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. 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 Hyundai Bioscience's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 Hyundai Bioscience had ₩21.6b of debt, an increase on ₩5.40b, over one year. But it also has ₩78.3b in cash to offset that, meaning it has ₩56.6b net cash.

How Strong Is Hyundai Bioscience's Balance Sheet?

The latest balance sheet data shows that Hyundai Bioscience had liabilities of ₩24.1b due within a year, and liabilities of ₩770.9m falling due after that. Offsetting this, it had ₩78.3b in cash and ₩356.6m in receivables that were due within 12 months. So it actually has ₩53.8b more liquid assets than total liabilities.

This surplus suggests that Hyundai Bioscience has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, Hyundai Bioscience boasts net cash, so it's fair to say it does not have a heavy debt load! When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Hyundai Bioscience 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 Hyundai Bioscience

Over 12 months, Hyundai Bioscience made a loss at the EBIT level, and saw its revenue drop to ₩11b, which is a fall of 5.8%. That's not what we would hope to see.

So How Risky Is Hyundai Bioscience?

While Hyundai Bioscience lost money on an earnings before interest and tax (EBIT) level, it actually generated positive free cash flow ₩3.7b. So although it is loss-making, it doesn't seem to have too much near-term balance sheet risk, keeping in mind the net cash. We'll feel more comfortable with the stock once EBIT is positive, given the lacklustre revenue growth. 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 instance, we've identified 3 warning signs for Hyundai Bioscience (2 don't sit too well with us) you should be aware of.

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.