Cash Flow Afflictions Strike Third of Kosdaq Companies

Over one-third of the Kosdaq listed companies are found to be suffering from cash flow problems as they obtained minus earnings from both of their business or investment activities, according to the Kosdaq market Wednesday.

After analyzing cash flows of 462 listed firms that close their books on December, 174 or 37.6 percent of them recorded minus earnings in both activities including Serome Technology and Hansoft Inc. and Dreamline Corp. This indicates that the firms are highly likely to encounter liquidity shortage problems as they will meet difficulty in securing operating funds due to a recent slump in the nation's both stock and bond markets.

Companies that were enjoying profits from both activities reached 26 or 5.6 percent of the total, which include Taesan LCD Co. and Dong Suh Companies Inc.

Those that are making profits only from business activities amounted to 233, comprising 50.3 percent of the total. They include Ncsoft Corp. and LG Home Shopping Inc. On the other hand, firms that were making positive earnings from their investment activities only reached 29 or 6.9 percent, which include Daum Communications Corp. and Seoul Mobile Telecom Corp.

by Chung Jae-hong