Is DUKSAN TECHOPIALtd (KOSDAQ:317330) Using Debt Sensibly?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. As with many other companies DUKSAN TECHOPIA Co.,Ltd. (KOSDAQ:317330) makes use of debt. But the more important question is: how much risk is that debt creating?

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Why Does Debt Bring Risk?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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 examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does DUKSAN TECHOPIALtd Carry?

As you can see below, DUKSAN TECHOPIALtd had ₩215.7b of debt at June 2025, down from ₩251.9b a year prior. However, it also had ₩107.0b in cash, and so its net debt is ₩108.7b.

A Look At DUKSAN TECHOPIALtd's Liabilities

According to the last reported balance sheet, DUKSAN TECHOPIALtd had liabilities of ₩330.8b due within 12 months, and liabilities of ₩86.2b due beyond 12 months. Offsetting these obligations, it had cash of ₩107.0b as well as receivables valued at ₩8.72b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by ₩301.2b.

This deficit is considerable relative to its market capitalization of ₩353.2b, so it does suggest shareholders should keep an eye on DUKSAN TECHOPIALtd's use of debt. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. There's no doubt that we learn most about debt from the balance sheet. But it is DUKSAN TECHOPIALtd's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

Check out our latest analysis for DUKSAN TECHOPIALtd

Over 12 months, DUKSAN TECHOPIALtd reported revenue of ₩100b, which is a gain of 3.0%, although it did not report any earnings before interest and tax. That rate of growth is a bit slow for our taste, but it takes all types to make a world.

Caveat Emptor

Over the last twelve months DUKSAN TECHOPIALtd produced an earnings before interest and tax (EBIT) loss. Its EBIT loss was a whopping ₩38b. 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. Another cause for caution is that is bled ₩44b in negative free cash flow over the last twelve months. So in short it's a really risky stock. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For example DUKSAN TECHOPIALtd has 3 warning signs (and 2 which can't be ignored) we think 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.

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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.