Is Com2uS Holdings (KOSDAQ:063080) Weighed On By Its Debt Load?

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 can see that Com2uS Holdings Corporation (KOSDAQ:063080) does use debt in its business. But is this debt a concern to shareholders?

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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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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 examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does Com2uS Holdings Carry?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 Com2uS Holdings had ₩184.7b of debt, an increase on ₩174.6b, over one year. However, it does have ₩30.7b in cash offsetting this, leading to net debt of about ₩154.0b.

How Strong Is Com2uS Holdings' Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Com2uS Holdings had liabilities of ₩166.9b due within 12 months and liabilities of ₩153.9b due beyond that. Offsetting this, it had ₩30.7b in cash and ₩15.7b in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by ₩274.5b.

This deficit casts a shadow over the ₩156.0b company, like a colossus towering over mere mortals. So we'd watch its balance sheet closely, without a doubt. After all, Com2uS Holdings would likely require a major re-capitalisation if it had to pay its creditors today. There's no doubt that we learn most about debt from the balance sheet. But it is Com2uS Holdings'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.

Check out our latest analysis for Com2uS Holdings

In the last year Com2uS Holdings had a loss before interest and tax, and actually shrunk its revenue by 21%, to ₩128b. That makes us nervous, to say the least.

Caveat Emptor

Not only did Com2uS Holdings's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost a very considerable ₩19b at the EBIT level. Considering that alongside the liabilities mentioned above make us nervous about the company. We'd want to see some strong near-term improvements before getting too interested in the stock. Not least because it had negative free cash flow of ₩11b over the last twelve months. So suffice it to say we consider the stock to be risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For example - Com2uS Holdings has 3 warning signs we think you should be aware of.

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.