Is WALLIX GROUP (EPA:ALLIX) Using Debt Sensibly?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We can see that WALLIX GROUP SA (EPA:ALLIX) does use debt in its business. But the more important question is: how much risk is that debt creating?

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What Risk Does Debt Bring?

Debt assists a business until the business has trouble paying it off, either with new capital or with free 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 thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is WALLIX GROUP's Debt?

As you can see below, WALLIX GROUP had €8.14m of debt, at June 2025, which is about the same as the year before. You can click the chart for greater detail. But it also has €9.43m in cash to offset that, meaning it has €1.29m net cash.

A Look At WALLIX GROUP's Liabilities

Zooming in on the latest balance sheet data, we can see that WALLIX GROUP had liabilities of €33.3m due within 12 months and liabilities of €10.2m due beyond that. Offsetting this, it had €9.43m in cash and €17.8m in receivables that were due within 12 months. So its liabilities total €16.3m more than the combination of its cash and short-term receivables.

Of course, WALLIX GROUP has a market capitalization of €152.3m, so these liabilities are probably manageable. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. Despite its noteworthy liabilities, WALLIX GROUP boasts net cash, so it's fair to say it does not have a heavy debt load! 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 WALLIX GROUP can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Check out our latest analysis for WALLIX GROUP

Over 12 months, WALLIX GROUP reported revenue of €42m, which is a gain of 22%, although it did not report any earnings before interest and tax. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is WALLIX GROUP?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And the fact is that over the last twelve months WALLIX GROUP lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through €2.8m of cash and made a loss of €1.8m. While this does make the company a bit risky, it's important to remember it has net cash of €1.29m. That means it could keep spending at its current rate for more than two years. WALLIX GROUP's revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. Pre-profit companies are often risky, but they can also offer great rewards. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. For example - WALLIX GROUP has 1 warning sign we think you should be aware of.

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.