Health Check: How Prudently Does Jacques Bogart (EPA:JBOG) Use Debt?
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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 Jacques Bogart S.A. (EPA:JBOG) makes use of debt. But is this debt a concern to shareholders?
When Is Debt A Problem?
Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first step when considering a company's debt levels is to consider its cash and debt together.
What Is Jacques Bogart's Debt?
The chart below, which you can click on for greater detail, shows that Jacques Bogart had €93.1m in debt in June 2025; about the same as the year before. However, it does have €19.0m in cash offsetting this, leading to net debt of about €74.1m.
How Strong Is Jacques Bogart's Balance Sheet?
We can see from the most recent balance sheet that Jacques Bogart had liabilities of €127.5m falling due within a year, and liabilities of €164.1m due beyond that. On the other hand, it had cash of €19.0m and €24.9m worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by €247.7m.
The deficiency here weighs heavily on the €67.1m company itself, as if a child were struggling under the weight of an enormous back-pack full of books, his sports gear, and a trumpet. So we'd watch its balance sheet closely, without a doubt. After all, Jacques Bogart would likely require a major re-capitalisation if it had to pay its creditors today. When analysing debt levels, the balance sheet is the obvious place to start. But it is Jacques Bogart's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.
See our latest analysis for Jacques Bogart
In the last year Jacques Bogart had a loss before interest and tax, and actually shrunk its revenue by 4.0%, to €278m. We would much prefer see growth.
Caveat Emptor
Importantly, Jacques Bogart had an earnings before interest and tax (EBIT) loss over the last year. To be specific the EBIT loss came in at €5.0m. Combining this information with the significant liabilities we already touched on makes us very hesitant about this stock, to say the least. Of course, it may be able to improve its situation with a bit of luck and good execution. Nevertheless, we would not bet on it given that it lost €9.6m in just last twelve months, and it doesn't have much by way of liquid assets. So we think this stock is quite risky. We'd prefer to pass. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 5 warning signs for Jacques Bogart (1 is significant!) that you should be aware of before investing here.
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
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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.