South Korea’s listed firms saw their financial health worsen in the first quarter of the year, data showed on May 27, amid an economic slowdown.
The average debt-equity ratio of 640 companies listed on the main Kospi bourse, came to 110.7 percent as of end-March, sharply up 6.37 percentage points from the end of last year, according to the data by the Korea Exchange.
The bourse operator didn’t provide the reason for the worsened debt-equity ratio of the companies that close their books in December.
A key barometer of financial soundness, the ratio is calculated by dividing a company’s total liabilities by its stockholders’ equity.
The companies’ debt totaled 1,358.15 trillion won ($1.14 trillion) as of end-March, up 7.5 percent from three months earlier, with their combined equity gaining 1.31 percent to 1,226.82 trillion won.
Approximately 54 percent of the total, or 346 firms, had a debt ratio of 100 percent or lower, while the ratio for 16.3 percent, or 104 companies, exceeded 200 percent. The remainder had an in-between ratio.
By Ram Garikipati and newswires (firstname.lastname@example.org)