Here's Why TS Trillion (KOSDAQ:317240) Can Afford Some 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 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 TS Trillion Co., Ltd. (KOSDAQ:317240) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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Why Does Debt Bring Risk?

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. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is TS Trillion's Net Debt?

You can click the graphic below for the historical numbers, but it shows that TS Trillion had ₩19.5b of debt in September 2025, down from ₩23.2b, one year before. However, it also had ₩3.14b in cash, and so its net debt is ₩16.3b.

How Healthy Is TS Trillion's Balance Sheet?

We can see from the most recent balance sheet that TS Trillion had liabilities of ₩23.3b falling due within a year, and liabilities of ₩6.26b due beyond that. Offsetting these obligations, it had cash of ₩3.14b as well as receivables valued at ₩4.18b due within 12 months. So its liabilities total ₩22.2b more than the combination of its cash and short-term receivables.

This is a mountain of leverage relative to its market capitalization of ₩28.4b. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since TS Trillion will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View our latest analysis for TS Trillion

In the last year TS Trillion had a loss before interest and tax, and actually shrunk its revenue by 16%, to ₩28b. We would much prefer see growth.

Caveat Emptor

While TS Trillion's falling revenue is about as heartwarming as a wet blanket, arguably its earnings before interest and tax (EBIT) loss is even less appealing. Indeed, it lost ₩317m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. We would feel better if it turned its trailing twelve month loss of ₩5.3b into a profit. In the meantime, we consider the stock very risky. 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. Case in point: We've spotted 1 warning sign for TS Trillion 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.