We Think Lyckegård Group (STO:LYGRD) Has A Fair Chunk Of Debt

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, Lyckegård Group AB (publ) (STO:LYGRD) does carry debt. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. 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, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Lyckegård Group's Debt?

The image below, which you can click on for greater detail, shows that at March 2025 Lyckegård Group had debt of kr23.8m, up from kr19.6m in one year. However, it does have kr3.31m in cash offsetting this, leading to net debt of about kr20.5m.

How Healthy Is Lyckegård Group's Balance Sheet?

We can see from the most recent balance sheet that Lyckegård Group had liabilities of kr83.2m falling due within a year, and liabilities of kr24.6m due beyond that. Offsetting these obligations, it had cash of kr3.31m as well as receivables valued at kr35.7m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by kr68.9m.

This deficit isn't so bad because Lyckegård Group is worth kr160.6m, and thus could probably raise enough capital to shore up its balance sheet, if the need arose. However, it is still worthwhile taking a close look at its ability to pay off debt. The balance sheet is clearly the area to focus on when you are analysing debt. But it is Lyckegård 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.

Check out our latest analysis for Lyckegård Group

Over 12 months, Lyckegård Group made a loss at the EBIT level, and saw its revenue drop to kr186m, which is a fall of 3.7%. We would much prefer see growth.

Caveat Emptor

Importantly, Lyckegård Group had an earnings before interest and tax (EBIT) loss over the last year. To be specific the EBIT loss came in at kr5.1m. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. However, it doesn't help that it burned through kr9.2m of cash over the last year. So in short it's a really risky stock. 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 instance, we've identified 4 warning signs for Lyckegård Group (2 can't be ignored) you should be aware of.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.