The balance sheet of South Korean companies trading on the main Kospi bourse has improved this year compared to the end of 2017 despite the growing economic uncertainties at home and abroad.
The consolidated debt ratio of Kospi-listed companies stood at 106.58 percent as of the end of September, down 1.85 percentage points from the end of 2017, according to the Korea Exchange and Korea Listed Companies Association on Monday. The compiled data covers the debt ratio of 585 companies out of total 754 companies listed on the Kospi with fiscal year ending on Dec. 31. Financial companies and those without previous year’s data for comparison were excluded.
The combined debt of the Kospi-listed companies totaled 1,168.02 trillion won ($1.0 trillion) as of end of September, up 4.83 percent from the end of 2017. Total equity capital expanded 6.64 percent to 1,095.9 trillion won over the same period.
Debt ratio compares a company’s total debt to its total equity capital, showing its level of financial risk. A debt level above 100 percent indicates the company has more debt than capital.
Of the 585 companies, more than half or 336 companies had debt ratio of 100 percent or below, compared with 332 companies last year. The number of companies with a debt ratio exceeding 100 percent but below 200 percent stood at 157, down from 170 companies last year. Those with a debt ratio exceeding 200 percent totaled 92 companies, up compared to 83 firms last year.
Total 11 business sectors including transportation equipment makers have successfully lowered their debt ratio level from last year. But the debt ratio of 12 sectors including refined oil products makers has gone up with that of real estate sector gaining most sharply. The consolidated debt ratio of real estate companies reached 349.6 percent on Sep. 30, more than tripled from the end of last year.
By Chung Seul-gi and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]