Is NEXTIN (KOSDAQ:348210) Using Too Much Debt?

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 can see that NEXTIN, Inc. (KOSDAQ:348210) does use debt in its business. But should shareholders be worried about its use of debt?

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

When Is Debt A Problem?

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 common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. 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 examine debt levels, we first consider both cash and debt levels, together.

What Is NEXTIN's Net Debt?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 NEXTIN had ₩24.5b of debt, an increase on ₩9.50b, over one year. However, it does have ₩26.0b in cash offsetting this, leading to net cash of ₩1.47b.

A Look At NEXTIN's Liabilities

According to the last reported balance sheet, NEXTIN had liabilities of ₩38.3b due within 12 months, and liabilities of ₩3.31b due beyond 12 months. On the other hand, it had cash of ₩26.0b and ₩15.3b worth of receivables due within a year. So its total liabilities are just about perfectly matched by its shorter-term, liquid assets.

Having regard to NEXTIN's size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the ₩464.8b company is struggling for cash, we still think it's worth monitoring its balance sheet. While it does have liabilities worth noting, NEXTIN also has more cash than debt, so we're pretty confident it can manage its debt safely.

Check out our latest analysis for NEXTIN

Also good is that NEXTIN grew its EBIT at 14% over the last year, further increasing its ability to manage debt. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine NEXTIN'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.

Finally, a company can only pay off debt with cold hard cash, not accounting profits. NEXTIN may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. In the last three years, NEXTIN created free cash flow amounting to 2.6% of its EBIT, an uninspiring performance. For us, cash conversion that low sparks a little paranoia about is ability to extinguish debt.

Summing Up

While it is always sensible to look at a company's total liabilities, it is very reassuring that NEXTIN has ₩1.47b in net cash. On top of that, it increased its EBIT by 14% in the last twelve months. So we are not troubled with NEXTIN's debt use. Over time, share prices tend to follow earnings per share, so if you're interested in NEXTIN, you may well want to click here to check an interactive graph of its earnings per share history.

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.

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.