Does Hyundai Glovis (KRX:086280) Have A Healthy Balance Sheet?

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.' 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. Importantly, Hyundai Glovis Co., Ltd. (KRX:086280) does carry debt. But should shareholders be worried about its use of debt?

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When Is Debt Dangerous?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. 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. 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 Hyundai Glovis's Debt?

As you can see below, Hyundai Glovis had ₩1.95t of debt at June 2025, down from ₩2.09t a year prior. However, its balance sheet shows it holds ₩4.90t in cash, so it actually has ₩2.94t net cash.

How Healthy Is Hyundai Glovis' Balance Sheet?

The latest balance sheet data shows that Hyundai Glovis had liabilities of ₩5.05t due within a year, and liabilities of ₩2.81t falling due after that. Offsetting these obligations, it had cash of ₩4.90t as well as receivables valued at ₩2.94t due within 12 months. So its total liabilities are just about perfectly matched by its shorter-term, liquid assets.

Having regard to Hyundai Glovis' size, it seems that its liquid assets are well balanced with its total liabilities. So while it's hard to imagine that the ₩14t company is struggling for cash, we still think it's worth monitoring its balance sheet. While it does have liabilities worth noting, Hyundai Glovis also has more cash than debt, so we're pretty confident it can manage its debt safely.

View our latest analysis for Hyundai Glovis

Also positive, Hyundai Glovis grew its EBIT by 26% in the last year, and that should make it easier to pay down debt, going forward. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Hyundai Glovis can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. While Hyundai Glovis has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. Happily for any shareholders, Hyundai Glovis actually produced more free cash flow than EBIT over the last three years. There's nothing better than incoming cash when it comes to staying in your lenders' good graces.

Summing Up

We could understand if investors are concerned about Hyundai Glovis's liabilities, but we can be reassured by the fact it has has net cash of ₩2.94t. And it impressed us with free cash flow of ₩1.9t, being 107% of its EBIT. So we don't think Hyundai Glovis's use of debt is risky. Over time, share prices tend to follow earnings per share, so if you're interested in Hyundai Glovis, you may well want to click here to check an interactive graph of its earnings per share history.

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.