Reading a Korean supplier's financial statements

Confirming a company is registered tells you it exists. It tells you nothing about whether it can fund your order, survive the six months your contract runs, or pay its own suppliers so that yours arrives. For that you need the numbers it filed.

Larger Korean corporations file summary financial statements that are published as open data. The figures are unaudited summaries rather than full accounts, and they lag — but for a buyer deciding whether to send a deposit they answer questions nothing else does.

The four figures that matter most

Revenue tells you about proportion, not health

A company with ₩50 billion of revenue is not automatically safer than one with ₩5 billion. What revenue gives you is proportion. If your order is 2% of annual turnover you are a normal customer. If it is 60%, you are effectively funding the company, and you should structure payment accordingly — because if they fail, they fail holding your money.

The debt ratio is not what English speakers expect

This is the figure most often misread. Korean filings compute 부채비율 as total liabilities divided by equity, not by assets. So 100% means liabilities exactly equal equity — a normal, unremarkable position. English-language habit reads “100% debt” as catastrophic, and it is not.

Korean practice treats under 100% as comfortable and over 200% as worth asking about. Those are conventions rather than rules, and they vary sharply by industry: capital-heavy manufacturers run higher than service businesses as a matter of course.

The current ratio is the one to look at before a deposit

The debt ratio describes the shape of the balance sheet. The current ratio describes whether the company can pay what falls due within the year, which is the question that actually concerns you. A supplier can carry heavy long-term borrowing and pay every bill on time, or carry very little and still be unable to.

Above roughly 1.5 is comfortable. Below 1.0 means more falls due within twelve months than the company holds in current assets — not necessarily fatal, and normal in some retail models, but the point at which a large prepayment deserves a second thought.

What these statements will not tell you

• They are old. A filing describes a year that ended months ago. A company can fail comfortably within that gap.
• They are summaries, not audited accounts. Treat them as indicative.
• They are not a credit assessment. Four figures do not substitute for a credit report, and no ratio predicts a fraud.
• Smaller companies file nothing. Absence of filings is not a warning sign — most Korean companies are simply below the threshold.

If nothing comes back for a company you are checking, that is the likeliest explanation. Confirm it is trading through its registration status instead, and weight the other evidence more heavily.

You can look up filed figures on the financials page. Note that this needs the thirteen-digit corporate registration number rather than the ten-digit business number on invoices — the two numbers are different, and sole traders have neither a corporate number nor filings.