Is Grupo Televisa (BMV:TLEVISACPO) Weighed On By Its Debt Load?

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 note that Grupo Televisa, S.A.B. (BMV:TLEVISACPO) does have debt on its balance sheet. But should shareholders be worried about its use of debt?

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When Is Debt Dangerous?

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. 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. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Grupo Televisa Carry?

You can click the graphic below for the historical numbers, but it shows that as of March 2025 Grupo Televisa had Mex$98.4b of debt, an increase on Mex$87.1b, over one year. On the flip side, it has Mex$43.5b in cash leading to net debt of about Mex$54.8b.

A Look At Grupo Televisa's Liabilities

According to the last reported balance sheet, Grupo Televisa had liabilities of Mex$28.8b due within 12 months, and liabilities of Mex$106.3b due beyond 12 months. On the other hand, it had cash of Mex$43.5b and Mex$19.0b worth of receivables due within a year. So it has liabilities totalling Mex$72.7b more than its cash and near-term receivables, combined.

This deficit casts a shadow over the Mex$21.1b company, like a colossus towering over mere mortals. So we'd watch its balance sheet closely, without a doubt. At the end of the day, Grupo Televisa would probably need a major re-capitalization if its creditors were to demand repayment. 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 Grupo Televisa'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.

Check out our latest analysis for Grupo Televisa

Over 12 months, Grupo Televisa made a loss at the EBIT level, and saw its revenue drop to Mex$61b, which is a fall of 6.3%. We would much prefer see growth.

Caveat Emptor

Importantly, Grupo Televisa had an earnings before interest and tax (EBIT) loss over the last year. Indeed, it lost Mex$607m at the EBIT level. If you consider the significant liabilities mentioned above, we are extremely wary of this investment. That said, it is possible that the company will turn its fortunes around. Nevertheless, we would not bet on it given that it lost Mex$8.9b in just last twelve months, and it doesn't have much by way of liquid assets. So while it's not wise to assume the company will fail, we do think it's risky. 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. We've identified 3 warning signs with Grupo Televisa , and understanding them should be part of your investment process.

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.