Puloon Technology Inc. (KOSDAQ:094940) is being analyzed for its use of debt in the latest stock report. While debt can be risky for a business, particularly when it cannot easily fulfill obligations, Puloon Technology seems to have a relatively conservative balance sheet. The company had ₩3.18b in debt in December 2024, with ₩9.86b in cash offsetting it, resulting in net cash of ₩6.68b.
The balance sheet shows that Puloon Technology had more liquid assets than total liabilities, suggesting it could eliminate its debt without much difficulty. The company has also been able to increase its EBIT by 23% in the last year, making it easier to pay down debt. However, its free cash flow conversion rate is low at 16% of EBIT over the last three years, which raises some concerns about its ability to extinguish debt.
Overall, while debt can be a concern for investors, Puloon Technology’s net cash position and EBIT growth suggest that its debt may not be a significant risk. It is important for investors to focus on the company’s balance sheet when analyzing debt, as well as other risks that may exist outside of the balance sheet. Ultimately, it’s often better to focus on companies that are free from net debt.
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