Stock Analysis

Does QuantaMatrix (KOSDAQ:317690) Have A Healthy Balance Sheet?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' 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. We can see that QuantaMatrix Inc. (KOSDAQ:317690) does use debt in its business. But the real question is whether this debt is making the company risky.

Advertisement

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. 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, 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. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is QuantaMatrix's Net Debt?

You can click the graphic below for the historical numbers, but it shows that QuantaMatrix had ₩16.2b of debt in June 2025, down from ₩17.4b, one year before. On the flip side, it has ₩13.1b in cash leading to net debt of about ₩3.16b.

debt-equity-history-analysis
KOSDAQ:A317690 Debt to Equity History October 13th 2025

A Look At QuantaMatrix's Liabilities

The latest balance sheet data shows that QuantaMatrix had liabilities of ₩18.9b due within a year, and liabilities of ₩1.52b falling due after that. Offsetting these obligations, it had cash of ₩13.1b as well as receivables valued at ₩637.6m due within 12 months. So its liabilities total ₩6.72b more than the combination of its cash and short-term receivables.

Since publicly traded QuantaMatrix shares are worth a total of ₩95.1b, it seems unlikely that this level of liabilities would be a major threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. There's no doubt that we learn most about debt from the balance sheet. But it is QuantaMatrix'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 QuantaMatrix

Over 12 months, QuantaMatrix made a loss at the EBIT level, and saw its revenue drop to ₩3.0b, which is a fall of 16%. That's not what we would hope to see.

Caveat Emptor

Not only did QuantaMatrix'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 ₩15b at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. However, it doesn't help that it burned through ₩14b of cash over the last year. So suffice it to say we consider the stock very risky. 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. These risks can be hard to spot. Every company has them, and we've spotted 6 warning signs for QuantaMatrix (of which 3 make us uncomfortable!) you should know about.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

Valuation is complex, but we're here to simplify it.

Discover if QuantaMatrix might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

Access Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.