Is IntoCell (KOSDAQ:287840) Using Debt In A Risky Way?

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 might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, IntoCell, Inc. (KOSDAQ:287840) does carry debt. But the real question is whether this debt is making the company risky.

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What Risk Does Debt Bring?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.

What Is IntoCell's Debt?

As you can see below, IntoCell had ₩10.0b of debt, at September 2025, which is about the same as the year before. You can click the chart for greater detail. But on the other hand it also has ₩30.4b in cash, leading to a ₩20.4b net cash position.

How Healthy Is IntoCell's Balance Sheet?

We can see from the most recent balance sheet that IntoCell had liabilities of ₩3.89b falling due within a year, and liabilities of ₩13.2b due beyond that. Offsetting this, it had ₩30.4b in cash and ₩817.3m in receivables that were due within 12 months. So it can boast ₩14.1b more liquid assets than total liabilities.

Having regard to IntoCell's size, it seems that its liquid assets are well balanced with its total liabilities. So it's very unlikely that the ₩950.2b company is short on cash, but still worth keeping an eye on the balance sheet. Succinctly put, IntoCell 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 it is future earnings, more than anything, that will determine IntoCell's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Check out our latest analysis for IntoCell

Over 12 months, IntoCell made a loss at the EBIT level, and saw its revenue drop to ₩1.7b, which is a fall of 40%. To be frank that doesn't bode well.

So How Risky Is IntoCell?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And the fact is that over the last twelve months IntoCell lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of ₩8.5b and booked a ₩10b accounting loss. But the saving grace is the ₩20.4b on the balance sheet. That means it could keep spending at its current rate for more than two years. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. To that end, you should learn about the 3 warning signs we've spotted with IntoCell (including 2 which are concerning) .

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.