Union Technologies Informatique Group (EPA:FPG) Is Making Moderate Use Of Debt

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. Importantly, Union Technologies Informatique Group S.A. (EPA:FPG) does carry debt. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

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. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Union Technologies Informatique Group's Debt?

You can click the graphic below for the historical numbers, but it shows that Union Technologies Informatique Group had €1.49m of debt in June 2025, down from €1.70m, one year before. However, because it has a cash reserve of €845.0k, its net debt is less, at about €645.0k.

How Healthy Is Union Technologies Informatique Group's Balance Sheet?

According to the last reported balance sheet, Union Technologies Informatique Group had liabilities of €7.48m due within 12 months, and liabilities of €2.08m due beyond 12 months. On the other hand, it had cash of €845.0k and €2.61m worth of receivables due within a year. So its liabilities total €6.10m more than the combination of its cash and short-term receivables.

This is a mountain of leverage relative to its market capitalization of €7.76m. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution. There's no doubt that we learn most about debt from the balance sheet. But it is Union Technologies Informatique Group'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.

View our latest analysis for Union Technologies Informatique Group

In the last year Union Technologies Informatique Group's revenue was pretty flat, and it made a negative EBIT. While that's not too bad, we'd prefer see growth.

Caveat Emptor

Importantly, Union Technologies Informatique Group had an earnings before interest and tax (EBIT) loss over the last year. Indeed, it lost a very considerable €1.5m at the EBIT level. 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. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. However, it doesn't help that it burned through €2.0m of cash over the last year. So suffice it to say we consider the stock very risky. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. These risks can be hard to spot. Every company has them, and we've spotted 5 warning signs for Union Technologies Informatique Group you should know about.

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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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.