Since 2022 Alza.sk has grown sales every year, from EUR 79.5m to EUR 621m

More sales, more profit, less money in the bank

Alza.sk s. r. o. is the Slovak arm of the Alza online retail group, selling electronics and a wide range of household goods. An s. r. o. is the Slovak limited liability company.

The income statement for 2025 reads well. Revenue rose to EUR 621m from EUR 543m, an increase of 14.5%. Operating profit rose 28.6% to EUR 8.6m, and net profit reached EUR 5.4m, up from EUR 4.5m. By every line of the income statement, the company had a better year.

The balance sheet tells a different story about money. Cash at the end of 2025 stood at EUR 4.7m, against EUR 11.4m a year earlier. That is a fall of EUR 6.7m, or 59.0%. A business that made a profit of EUR 5.4m ended the year holding considerably less cash than it started with.

Profit and cash are not the same thing, and every controller knows it. Still, the gap here is large enough to ask where the money went.

A retailer that should be paid first, and was not this time

The textbook reason growth eats cash is simple. A company buys stock before it sells it, delivers before it invoices, and invoices before it is paid. Profit is booked when the sale happens. The cash arrives later. The faster sales grow, the more money sits in stock and unpaid invoices at any given moment.

Online retail is supposed to be the exception. Customers usually pay by card or on delivery, so the money comes in within days. Suppliers of electronics are typically paid on terms of several weeks. In a healthy setup, the retailer holds the customer's money before it pays the supplier, and growth releases cash rather than consuming it. That is what makes the 2025 pattern at Alza.sk worth a closer look.

Three things about Alza.sk in 2025 point towards an answer, though none of them settles it on its own.

First, the balance sheet grew while cash shrank. Total assets rose to EUR 127m from EUR 98.0m. If the whole balance sheet got bigger and the cash part got smaller, something else on the asset side absorbed the money.

Second, depreciation and amortisation rose to EUR 4.2m from EUR 3.4m. Higher depreciation usually means the company has more fixed assets to write down, such as warehouses, pick-up points or systems. That fits a business investing in capacity, which is paid for up front and earned back over years. It is a plausible part of the answer. It is not the whole answer.

Third, the company did not hand its profit out. Equity rose by EUR 5.4m to EUR 9.9m, which matches the year's net profit of EUR 5.4m. That suggests the profit was kept in the company rather than paid out as a dividend. So the cash did not leave through the owners' door. It went into the business itself, or into the group.

That last possibility matters. Alza.sk belongs to a larger group, and groups often manage cash centrally: subsidiaries lend surplus money to the parent or to each other. If that happened, the cash still exists, only on another company's balance sheet. The individual statements alone cannot confirm it. The notes to the accounts and the related party disclosures would.

Fast growth leaves a thin cushion

The cash question sits on top of a longer story. Revenue at Alza.sk grew from EUR 79.5m in 2022 to EUR 239m in 2023, EUR 543m in 2024 and EUR 621m in 2025. That is an average annual growth rate of 98.5% over three years. A jump of that kind in a retailer usually means a change in how the group runs its Slovak business, not only more customers.

What the growth has not done is build a large equity buffer. Equity covers 7.9% of total assets at the end of 2025, up from 4.6% a year earlier. The improvement is real, but the layer is thin. Most of the balance sheet is funded by suppliers, lenders or group companies rather than by the owners.

The margins explain why. The operating margin was 1.4% in 2025, against 1.2% in 2024. The net margin was 0.9%. This is normal for electronics retail, where prices are public and competitors are one click away. It also means that a large rise in revenue produces a modest amount of profit in euros, while the stock and capacity needed to serve that revenue can cost far more. On thin margins, growth is paid for by working capital and outside money long before profit catches up.

I would not read distress into this. The company is profitable, its margins edged up and its equity grew. What I would say is that the income statement and the cash balance moved in opposite directions, and only the notes can tell which reading is right: investment, stock build, or cash parked in the group.

What to check in your own company

You do not need a group structure or an e-commerce platform to have this problem. Any business that grows quickly can show a rising profit and a falling bank balance at the same time. Here is a check you can do tomorrow with last year's and this year's balance sheet.

Take your revenue growth for the year as a percentage. Then work out the same percentage change for three lines: stock, trade receivables and trade payables. If stock and receivables grew faster than revenue, your growth is absorbing cash. If payables grew more slowly than revenue, your suppliers are funding less of it than before. Either way, you have found where the money went.

Then do the second half. Take your current cash plus any undrawn credit line, and divide it by the amount of cash your working capital absorbed last year. The result is roughly how many years of growth at the same pace you can carry before you need new money. If the answer is under one, the conversation with your bank should happen now, not when the account is empty.

Finally, if you are part of a group, ask your finance team for one figure: how much of your money currently sits with other group companies, and on what terms you can get it back.

Alza.sk had a profitable 2025, and the income statement deserves the credit. The cash balance deserves the questions. A profit of EUR 5.4m is a fine result, but the bank only accepts cash.