To be frank both Towngas Smart Energy's conversion of EBIT to free cash flow and its track record of staying on top of its total liabilities make us rather uncomfortable with its debt levels. Having said that, its ability to grow its EBIT isn't such a worry. It's also worth noting that Towngas Smart Energy is in the Gas Utilities industry, which is often considered to be quite defensive. After considering the datapoints discussed, we think Towngas Smart Energy has too much debt. While some investors love that sort of risky play, it's certainly not our cup of tea. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 3 warning signs for Towngas Smart Energy (1 is significant!) that you should be aware of before investing here.