Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' 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. Importantly, iWIN PLUS CO.,LTD. (KOSDAQ:123010) does carry debt. But the real question is whether this debt is making the company risky.
When Is Debt Dangerous?
Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own 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. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we think about a company's use of debt, we first look at cash and debt together.
What Is iWIN PLUSLTD's Net Debt?
You can click the graphic below for the historical numbers, but it shows that iWIN PLUSLTD had ₩15.1b of debt in March 2025, down from ₩26.7b, one year before. However, it also had ₩5.14b in cash, and so its net debt is ₩9.93b.
A Look At iWIN PLUSLTD's Liabilities
We can see from the most recent balance sheet that iWIN PLUSLTD had liabilities of ₩15.9b falling due within a year, and liabilities of ₩7.67b due beyond that. On the other hand, it had cash of ₩5.14b and ₩13.2b worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by ₩5.22b.
Since publicly traded iWIN PLUSLTD shares are worth a total of ₩26.1b, it seems unlikely that this level of liabilities would be a major threat. However, we do think it is worth keeping an eye on its balance sheet strength, as it may change over time. There's no doubt that we learn most about debt from the balance sheet. But it is iWIN PLUSLTD'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 iWIN PLUSLTD
In the last year iWIN PLUSLTD wasn't profitable at an EBIT level, but managed to grow its revenue by 15%, to ₩40b. That rate of growth is a bit slow for our taste, but it takes all types to make a world.
Caveat Emptor
Importantly, iWIN PLUSLTD had an earnings before interest and tax (EBIT) loss over the last year. Its EBIT loss was a whopping ₩4.1b. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled ₩5.2b in negative free cash flow over the last twelve months. So suffice it to say we consider the stock very risky. 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. These risks can be hard to spot. Every company has them, and we've spotted 3 warning signs for iWIN PLUSLTD (of which 2 are concerning!) you should know about.
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.
Valuation is complex, but we're here to simplify it.
Discover if iWIN PLUSLTD might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.