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Is Keeps Biopharma (KOSDAQ:256940) Using Too Much Debt?

Simply Wall St · 5d ago

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.' 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 Keeps Biopharma Inc. (KOSDAQ:256940) does use debt in its business. But the real question is whether this debt is making the company risky.

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. 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. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

How Much Debt Does Keeps Biopharma Carry?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Keeps Biopharma had ₩70.9b of debt, an increase on ₩40.9b, over one year. However, because it has a cash reserve of ₩39.6b, its net debt is less, at about ₩31.3b.

debt-equity-history-analysis
KOSDAQ:A256940 Debt to Equity History January 6th 2026

How Strong Is Keeps Biopharma's Balance Sheet?

We can see from the most recent balance sheet that Keeps Biopharma had liabilities of ₩71.6b falling due within a year, and liabilities of ₩52.1b due beyond that. Offsetting these obligations, it had cash of ₩39.6b as well as receivables valued at ₩17.9b due within 12 months. So its liabilities total ₩66.2b more than the combination of its cash and short-term receivables.

Keeps Biopharma has a market capitalization of ₩240.5b, so it could very likely raise cash to ameliorate its balance sheet, if the need arose. However, it is still worthwhile taking a close look at its ability to pay off debt. There's no doubt that we learn most about debt from the balance sheet. But it is Keeps Biopharma'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.

See our latest analysis for Keeps Biopharma

In the last year Keeps Biopharma wasn't profitable at an EBIT level, but managed to grow its revenue by 25%, to ₩158b. With any luck the company will be able to grow its way to profitability.

Caveat Emptor

While we can certainly appreciate Keeps Biopharma's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. To be specific the EBIT loss came in at ₩749m. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. However, it doesn't help that it burned through ₩18b of cash over the last year. So suffice it to say we consider the stock very risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. These risks can be hard to spot. Every company has them, and we've spotted 1 warning sign for Keeps Biopharma 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.