Would Enogia SAS (EPA:ALENO) Be Better Off With Less Debt?
The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Enogia SAS (EPA:ALENO) makes use of debt. But is this debt a concern to shareholders?
Why Does Debt Bring Risk?
Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.
How Much Debt Does Enogia SAS Carry?
The chart below, which you can click on for greater detail, shows that Enogia SAS had €6.64m in debt in June 2025; about the same as the year before. However, because it has a cash reserve of €2.29m, its net debt is less, at about €4.34m.
How Healthy Is Enogia SAS' Balance Sheet?
The latest balance sheet data shows that Enogia SAS had liabilities of €10.6m due within a year, and liabilities of €3.09m falling due after that. Offsetting these obligations, it had cash of €2.29m as well as receivables valued at €10.9m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by €499.0k.
This state of affairs indicates that Enogia SAS' balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So it's very unlikely that the €26.9m company is short on cash, but still worth keeping an eye on the balance sheet. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Enogia SAS's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
See our latest analysis for Enogia SAS
In the last year Enogia SAS wasn't profitable at an EBIT level, but managed to grow its revenue by 39%, to €12m. Shareholders probably have their fingers crossed that it can grow its way to profits.
Caveat Emptor
Despite the top line growth, Enogia SAS still had an earnings before interest and tax (EBIT) loss over the last year. To be specific the EBIT loss came in at €918k. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. So we think its balance sheet is a little strained, though not beyond repair. For example, we would not want to see a repeat of last year's loss of €419k. So to be blunt we do think it is risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should be aware of the 1 warning sign we've spotted with Enogia SAS .
Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.