Is Peptron (KOSDAQ:087010) Weighed On By Its Debt Load?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the 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. Importantly, Peptron, Inc. (KOSDAQ:087010) does carry debt. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

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. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest 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 Peptron's Debt?

As you can see below, at the end of September 2025, Peptron had ₩30.1b of debt, up from ₩12.5b a year ago. Click the image for more detail. However, its balance sheet shows it holds ₩107.0b in cash, so it actually has ₩77.0b net cash.

How Strong Is Peptron's Balance Sheet?

The latest balance sheet data shows that Peptron had liabilities of ₩7.29b due within a year, and liabilities of ₩30.1b falling due after that. Offsetting this, it had ₩107.0b in cash and ₩5.43b in receivables that were due within 12 months. So it actually has ₩75.0b more liquid assets than total liabilities.

This state of affairs indicates that Peptron's balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So while it's hard to imagine that the ₩7.93t company is struggling for cash, we still think it's worth monitoring its balance sheet. Succinctly put, Peptron 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 you can't view debt in total isolation; since Peptron 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.

View our latest analysis for Peptron

In the last year Peptron wasn't profitable at an EBIT level, but managed to grow its revenue by 157%, to ₩6.2b. So its pretty obvious shareholders are hoping for more growth!

So How Risky Is Peptron?

Statistically speaking companies that lose money are riskier than those that make money. And we do note that Peptron had an earnings before interest and tax (EBIT) loss, over the last year. Indeed, in that time it burnt through ₩20b of cash and made a loss of ₩14b. While this does make the company a bit risky, it's important to remember it has net cash of ₩77.0b. That kitty means the company can keep spending for growth for at least two years, at current rates. The good news for shareholders is that Peptron has dazzling revenue growth, so there's a very good chance it can boost its free cash flow in the years to come. High growth pre-profit companies may well be risky, but they can also offer great rewards. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 3 warning signs for Peptron you should be aware of, and 1 of them is significant.

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.