Kolon TissueGene (KOSDAQ:950160) Has Debt But No Earnings; Should You Worry?

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 seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Kolon TissueGene, Inc. (KOSDAQ:950160) does carry debt. But the more important question is: how much risk is that debt creating?

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When Is Debt Dangerous?

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 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, 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 Kolon TissueGene's Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Kolon TissueGene had ₩70.7b of debt, an increase on ₩10.9b, over one year. But it also has ₩118.0b in cash to offset that, meaning it has ₩47.3b net cash.

A Look At Kolon TissueGene's Liabilities

Zooming in on the latest balance sheet data, we can see that Kolon TissueGene had liabilities of ₩218.2b due within 12 months and liabilities of ₩4.43b due beyond that. Offsetting this, it had ₩118.0b in cash and ₩695.8m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by ₩103.9b.

Having regard to Kolon TissueGene's size, it seems that its liquid assets are well balanced with its total liabilities. So it's very unlikely that the ₩7.11t company is short on cash, but still worth keeping an eye on the balance sheet. Despite its noteworthy liabilities, Kolon TissueGene 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 future earnings, more than anything, that will determine Kolon TissueGene's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

View our latest analysis for Kolon TissueGene

In the last year Kolon TissueGene's revenue was pretty flat, and it made a negative EBIT. While that hardly impresses, its not too bad either.

So How Risky Is Kolon TissueGene?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And the fact is that over the last twelve months Kolon TissueGene lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through ₩132b of cash and made a loss of ₩87b. Given it only has net cash of ₩47.3b, the company may need to raise more capital if it doesn't reach break-even soon. Summing up, we're a little skeptical of this one, as it seems fairly risky in the absence of free cashflow. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 3 warning signs for Kolon TissueGene (1 can't be ignored!) that you should be aware of before investing here.

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.

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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.