U.S. markets open in 3 hours 2 minutes
  • S&P Futures

    3,419.50
    -32.25 (-0.93%)
     
  • Dow Futures

    27,924.00
    -265.00 (-0.94%)
     
  • Nasdaq Futures

    11,573.00
    -90.50 (-0.78%)
     
  • Russell 2000 Futures

    1,615.00
    -20.60 (-1.26%)
     
  • Crude Oil

    38.93
    -0.92 (-2.31%)
     
  • Gold

    1,904.70
    -0.50 (-0.03%)
     
  • Silver

    24.32
    -0.36 (-1.46%)
     
  • EUR/USD

    1.1816
    -0.0052 (-0.44%)
     
  • 10-Yr Bond

    0.8410
    0.0000 (0.00%)
     
  • Vix

    29.98
    +1.87 (+6.65%)
     
  • GBP/USD

    1.3058
    +0.0020 (+0.16%)
     
  • USD/JPY

    104.8700
    +0.1800 (+0.17%)
     
  • BTC-USD

    13,071.50
    -5.51 (-0.04%)
     
  • CMC Crypto 200

    262.44
    +0.98 (+0.38%)
     
  • FTSE 100

    5,844.97
    -15.31 (-0.26%)
     
  • Nikkei 225

    23,494.34
    -22.25 (-0.09%)
     

Agilent's Debt Overview

Benzinga Insights
·2 mins read

Shares of Agilent Technologies Inc. (NYSE: A) rose by 14.74% in the past three months. Before having a look at the importance of debt, let's look at how much debt Agilent Technologies has.

Agilent Technologies's Debt

Based on Agilent Technologies’s financial statement as of June 1, 2020, long-term debt is at $1.79 billion and current debt is at $700.00 million, amounting to $2.49 billion in total debt. Adjusted for $1.32 billion in cash-equivalents, the company's net debt is at $1.16 billion.

Investors look at the debt-ratio to understand how much financial leverage a company has. Agilent Technologies has $9.46 billion in total assets, therefore making the debt-ratio 0.26. As a rule of thumb, a debt-ratio more than 1 indicates that a considerable portion of debt is funded by assets. A higher debt-ratio can also imply that the company might be putting itself at risk for default, if interest rates were to increase. However, debt-ratios vary widely across different industries. A debt ratio of 35% might be higher for one industry, whereas average for another.

Why Debt Is Important

Besides equity, debt is an important factor in the capital structure of a company, and contributes to its growth. Due to its lower financing cost compared to equity, it becomes an attractive option for executives trying to raise capital.

Interest-payment obligations can impact the cash-flow of the company. Having financial leverage also allows companies to use additional capital for business operations, allowing equity owners to retain excess profit, generated by the debt capital.

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.