U.S. Markets open in 47 mins
  • S&P Futures

    3,634.75
    +7.50 (+0.21%)
     
  • Dow Futures

    29,887.00
    +59.00 (+0.20%)
     
  • Nasdaq Futures

    12,196.25
    +44.00 (+0.36%)
     
  • Russell 2000 Futures

    1,842.60
    -2.00 (-0.11%)
     
  • Crude Oil

    45.48
    -0.23 (-0.50%)
     
  • Gold

    1,810.10
    -1.10 (-0.06%)
     
  • Silver

    23.26
    -0.19 (-0.79%)
     
  • EUR/USD

    1.1925
    +0.0011 (+0.0954%)
     
  • 10-Yr Bond

    0.8780
    -0.0040 (-0.45%)
     
  • Vix

    21.40
    -0.24 (-1.11%)
     
  • GBP/USD

    1.3319
    -0.0038 (-0.2824%)
     
  • USD/JPY

    104.1710
    -0.0790 (-0.0758%)
     
  • BTC-USD

    16,898.59
    -268.06 (-1.56%)
     
  • CMC Crypto 200

    330.64
    -39.87 (-10.76%)
     
  • FTSE 100

    6,337.37
    -25.56 (-0.40%)
     
  • Nikkei 225

    26,644.71
    +107.40 (+0.40%)
     

How Does Biogen's Debt Look Like?

Benzinga Insights
·2 min read

Over the past three months, shares of Biogen Inc. (NASDAQ: BIIB) fell by 5.50%. Before having a look at the importance of debt, let's look at how much debt Biogen has.

Biogen's Debt

Based on Biogen’s balance sheet as of July 22, 2020, long-term debt is at $7.42 billion and current debt is at $0.00, amounting to $7.42 billion in total debt. Adjusted for $2.38 billion in cash-equivalents, the company's net debt is at $5.04 billion.

To understand the degree of financial leverage a company has, investors look at the debt ratio. Considering Biogen’s $25.51 billion in total assets, the debt-ratio is at 0.29. 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.

Importance of Debt

Debt is an important factor in the capital structure of a company, and can help it attain growth. Debt usually has a relatively lower financing cost than equity, which makes it an attractive option for executives.

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.