Health Check: How Prudently Does Iljin DiamondLtd (KRX:081000) Use Debt?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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 can see that Iljin Diamond Co.,Ltd (KRX:081000) does use debt in its business. But the real question is whether this debt is making the company risky.

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When Is Debt A Problem?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. If things get really bad, the lenders can take control of the business. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

What Is Iljin DiamondLtd's Debt?

As you can see below, Iljin DiamondLtd had ₩11.8b of debt at June 2025, down from ₩16.4b a year prior. However, it does have ₩374.8b in cash offsetting this, leading to net cash of ₩363.0b.

A Look At Iljin DiamondLtd's Liabilities

Zooming in on the latest balance sheet data, we can see that Iljin DiamondLtd had liabilities of ₩45.5b due within 12 months and liabilities of ₩18.9b due beyond that. On the other hand, it had cash of ₩374.8b and ₩27.4b worth of receivables due within a year. So it actually has ₩337.8b more liquid assets than total liabilities.

This surplus strongly suggests that Iljin DiamondLtd has a rock-solid balance sheet (and the debt is of no concern whatsoever). Having regard to this fact, we think its balance sheet is as strong as an ox. Succinctly put, Iljin DiamondLtd 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 Iljin DiamondLtd 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.

See our latest analysis for Iljin DiamondLtd

Over 12 months, Iljin DiamondLtd reported revenue of ₩155b, which is a gain of 5.9%, although it did not report any earnings before interest and tax. We usually like to see faster growth from unprofitable companies, but each to their own.

So How Risky Is Iljin DiamondLtd?

Although Iljin DiamondLtd had an earnings before interest and tax (EBIT) loss over the last twelve months, it made a statutory profit of ₩11b. So when you consider it has net cash, along with the statutory profit, the stock probably isn't as risky as it might seem, at least in the short term. The next few years will be important as the business matures. 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. To that end, you should be aware of the 3 warning signs we've spotted with Iljin DiamondLtd .

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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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.