Is Parataxis Korea (KOSDAQ:288330) Using Too Much Debt?

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.' 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. Importantly, Parataxis Korea, Inc. (KOSDAQ:288330) does carry debt. But the more important question is: how much risk is that debt creating?

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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 common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is Parataxis Korea's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Parataxis Korea had ₩2.78b of debt, an increase on none, over one year. However, it does have ₩23.5b in cash offsetting this, leading to net cash of ₩20.8b.

How Healthy Is Parataxis Korea's Balance Sheet?

The latest balance sheet data shows that Parataxis Korea had liabilities of ₩2.76b due within a year, and liabilities of ₩4.39b falling due after that. Offsetting this, it had ₩23.5b in cash and ₩174.0m in receivables that were due within 12 months. So it can boast ₩16.6b more liquid assets than total liabilities.

This surplus suggests that Parataxis Korea is using debt in a way that is appears to be both safe and conservative. Due to its strong net asset position, it is not likely to face issues with its lenders. Succinctly put, Parataxis Korea 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 it is Parataxis Korea'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 Parataxis Korea

Over 12 months, Parataxis Korea reported revenue of ₩10m, which is a gain of 834%, although it did not report any earnings before interest and tax. When it comes to revenue growth, that's like nailing the game winning 3-pointer!

So How Risky Is Parataxis Korea?

Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months Parataxis Korea lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through ₩36b of cash and made a loss of ₩17b. Given it only has net cash of ₩20.8b, the company may need to raise more capital if it doesn't reach break-even soon. The good news for shareholders is that Parataxis Korea has dazzling revenue growth, so there's a very good chance it can boost its free cash flow in the years to come. While unprofitable companies can be risky, they can also grow hard and fast in those pre-profit years. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 6 warning signs for Parataxis Korea (3 shouldn't be ignored) 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.