Seoul Broadcasting System (KRX:034120) Has Debt But No Earnings; Should You Worry?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' 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. As with many other companies Seoul Broadcasting System (KRX:034120) makes use of debt. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

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. 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. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Seoul Broadcasting System's Debt?

The image below, which you can click on for greater detail, shows that Seoul Broadcasting System had debt of ₩339.8b at the end of March 2025, a reduction from ₩375.6b over a year. However, its balance sheet shows it holds ₩347.4b in cash, so it actually has ₩7.66b net cash.

How Strong Is Seoul Broadcasting System's Balance Sheet?

The latest balance sheet data shows that Seoul Broadcasting System had liabilities of ₩411.8b due within a year, and liabilities of ₩140.5b falling due after that. On the other hand, it had cash of ₩347.4b and ₩202.7b worth of receivables due within a year. So these liquid assets roughly match the total liabilities.

Having regard to Seoul Broadcasting System's size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the ₩481.3b company is struggling for cash, we still think it's worth monitoring its balance sheet. Despite its noteworthy liabilities, Seoul Broadcasting System boasts net cash, so it's fair to say it does not have a heavy debt load! There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Seoul Broadcasting System can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Check out our latest analysis for Seoul Broadcasting System

Over 12 months, Seoul Broadcasting System reported revenue of ₩1.0t, which is a gain of 5.5%, 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 Seoul Broadcasting System?

Although Seoul Broadcasting System had an earnings before interest and tax (EBIT) loss over the last twelve months, it made a statutory profit of ₩14b. 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. With revenue growth uninspiring, we'd really need to see some positive EBIT before mustering much enthusiasm for this business. 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 3 warning signs for Seoul Broadcasting System 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.