Does Korea Robot ManufacturingLtd (KOSDAQ:093640) Have A Healthy Balance Sheet?

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.' 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. We note that Korea Robot Manufacturing Co.,Ltd. (KOSDAQ:093640) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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Why Does Debt Bring Risk?

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. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth 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 Korea Robot ManufacturingLtd's Debt?

As you can see below, Korea Robot ManufacturingLtd had ₩34.9b of debt at June 2025, down from ₩102.5b a year prior. However, it does have ₩52.1b in cash offsetting this, leading to net cash of ₩17.3b.

A Look At Korea Robot ManufacturingLtd's Liabilities

According to the last reported balance sheet, Korea Robot ManufacturingLtd had liabilities of ₩36.7b due within 12 months, and liabilities of ₩417.4m due beyond 12 months. On the other hand, it had cash of ₩52.1b and ₩1.61b worth of receivables due within a year. So it can boast ₩16.6b more liquid assets than total liabilities.

This short term liquidity is a sign that Korea Robot ManufacturingLtd could probably pay off its debt with ease, as its balance sheet is far from stretched. Simply put, the fact that Korea Robot ManufacturingLtd has more cash than debt is arguably a good indication that it can manage its debt safely. The balance sheet is clearly the area to focus on when you are analysing debt. But you can't view debt in total isolation; since Korea Robot ManufacturingLtd 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 Korea Robot ManufacturingLtd

Over 12 months, Korea Robot ManufacturingLtd made a loss at the EBIT level, and saw its revenue drop to ₩9.3b, which is a fall of 18%. We would much prefer see growth.

So How Risky Is Korea Robot ManufacturingLtd?

Statistically speaking companies that lose money are riskier than those that make money. And we do note that Korea Robot ManufacturingLtd had an earnings before interest and tax (EBIT) loss, over the last year. Indeed, in that time it burnt through ₩8.2b of cash and made a loss of ₩21b. But the saving grace is the ₩17.3b 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. But ultimately, every company can contain risks that exist outside of the balance sheet. Be aware that Korea Robot ManufacturingLtd is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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.