These 4 Measures Indicate That Bucher Industries (VTX:BUCN) Is Using Debt Reasonably Well

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. Importantly, Bucher Industries AG (VTX:BUCN) does carry debt. But should shareholders be worried about its use of debt?

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When Is Debt A Problem?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is Bucher Industries's Net Debt?

As you can see below, Bucher Industries had CHF44.1m of debt at June 2025, down from CHF205.8m a year prior. But on the other hand it also has CHF371.4m in cash, leading to a CHF327.3m net cash position.

How Strong Is Bucher Industries' Balance Sheet?

The latest balance sheet data shows that Bucher Industries had liabilities of CHF794.9m due within a year, and liabilities of CHF92.4m falling due after that. On the other hand, it had cash of CHF371.4m and CHF646.9m worth of receivables due within a year. So it can boast CHF131.0m more liquid assets than total liabilities.

This short term liquidity is a sign that Bucher Industries could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Bucher Industries boasts net cash, so it's fair to say it does not have a heavy debt load!

See our latest analysis for Bucher Industries

But the bad news is that Bucher Industries has seen its EBIT plunge 19% in the last twelve months. If that rate of decline in earnings continues, the company could find itself in a tight spot. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Bucher Industries can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. While Bucher Industries has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance. During the last three years, Bucher Industries produced sturdy free cash flow equating to 51% of its EBIT, about what we'd expect. This free cash flow puts the company in a good position to pay down debt, when appropriate.

Summing Up

While it is always sensible to investigate a company's debt, in this case Bucher Industries has CHF327.3m in net cash and a decent-looking balance sheet. So we are not troubled with Bucher Industries's debt use. Over time, share prices tend to follow earnings per share, so if you're interested in Bucher Industries, you may well want to click here to check an interactive graph of its earnings per share history.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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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.