As of the third quarter of 2024, 19.5 percent of the country’s 2,260 listed firms - equivalent to 440 companies - fell into this category.
Marginal firms are defined as those with an interest coverage ratio below 1 for three consecutive years, meaning they consistently fail to generate enough profit to meet debt obligations. The number of such firms has surged 2.7 times since 2016, when 163 companies met the criteria.
The growth of struggling firms has been particularly pronounced among KOSDAQ-listed companies, which tend to be smaller and more technology-driven.
The share of marginal firms in this sector climbed 17.1 percentage points to 23.7 percent between 2016 and 2024. By contrast, KOSPI-listed companies experienced a comparatively modest increase of 2.5 percentage points, reaching 10.9 percent.
Among industries, the real estate sector recorded the highest proportion of marginal firms, at 33.3 percent.
The report also highlighted the broader financial vulnerability of South Korean firms. Some 36.4 percent of listed companies were classified as “temporary marginal firms,” meaning they recorded an interest coverage ratio below 1 for the most recent year.
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