Kinco Automation (Shanghai)Ltd (SHSE:688160) does carry debt, but is this debt a concern to shareholders? The companys balance sheet indicates that it may be able to manage its debt safely, despite having CN¥122.3m of debt as of September 2024. However, its balance sheet shows that it holds CN²348.7m in cash, which suggests it could eliminate its debt without difficulty. The company also has more liquid assets than liabilities and is in a strong position to pay down debt. While the balance sheet is the main area to focus on, it is also crucial to assess the businesss ability to convert its earnings before interest and tax (EBIT) to free cash flow, which will influence its ability to manage debt.
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