Puloon Technology Inc. (KOSDAQ:094940) may have some debt, but its balance sheet shows that it has net cash of ₩6.68b and more liquid assets than liabilities. The company’s EBIT has also grown by 23% in the last year, indicating its ability to manage its debt. While debt can be a risk for businesses, it seems that Puloon Technology is in a strong position to handle its obligations.
Warren Buffett’s quote about volatility not necessarily equating to risk is a good reminder when considering a company’s debt. Debt becomes risky when a business cannot easily meet its obligations, but in the case of Puloon Technology, its balance sheet shows a conservative approach to debt management. The company has been able to increase its EBIT and has more liquid assets than liabilities, indicating a strong financial position.
Investors interested in Puloon Technology should pay attention to its ability to convert earnings to free cash flow, as this will impact its ability to pay down debt. While the company has shown low cash conversion in the past, its overall balance sheet and EBIT growth suggest that its debt may not be a significant risk. However, it’s important to always consider potential risks and keep an eye on warning signs that may arise.
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