U.S. markets open in 7 hours 12 minutes
  • S&P Futures

    4,241.00
    +9.50 (+0.22%)
     
  • Dow Futures

    33,839.00
    +80.00 (+0.24%)
     
  • Nasdaq Futures

    14,301.75
    +38.75 (+0.27%)
     
  • Russell 2000 Futures

    2,307.90
    +7.60 (+0.33%)
     
  • Crude Oil

    73.27
    +0.19 (+0.26%)
     
  • Gold

    1,776.20
    -7.20 (-0.40%)
     
  • Silver

    25.94
    -0.17 (-0.65%)
     
  • EUR/USD

    1.1932
    -0.0001 (-0.01%)
     
  • 10-Yr Bond

    1.4870
    0.0000 (0.00%)
     
  • Vix

    16.32
    -0.34 (-2.04%)
     
  • GBP/USD

    1.3965
    +0.0001 (+0.01%)
     
  • USD/JPY

    110.8260
    -0.1360 (-0.12%)
     
  • BTC-USD

    32,760.99
    -1,327.61 (-3.89%)
     
  • CMC Crypto 200

    790.49
    -19.70 (-2.43%)
     
  • FTSE 100

    7,074.06
    -15.95 (-0.22%)
     
  • Nikkei 225

    28,866.47
    -8.42 (-0.03%)
     

How Does L3Harris Technologies Debt Look?

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.

Shares of L3Harris Technologies (NYSE:LHX) fell by 3.13% in the past three months. Before having a look at the importance of debt, let us look at how much debt L3Harris Technologies has.

L3Harris Technologies's Debt

According to the L3Harris Technologies's most recent financial statement as reported on November 2, 2020, total debt is at $6.93 billion, with $6.26 billion in long-term debt and $668.00 million in current debt. Adjusting for $1.34 billion in cash-equivalents, the company has a net debt of $5.59 billion.

Let's define some of the terms we used in the paragraph above. Current debt is the portion of a company's debt which is due within 1 year, while long-term debt is the portion due in more than 1 year. Cash equivalents include cash and any liquid securities with maturity periods of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

To understand the degree of financial leverage a company has, investors look at the debt ratio. Considering L3Harris Technologies's $37.15 billion in total assets, the debt-ratio is at 0.19. As a rule of thumb, a debt-ratio more than one 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 40% might be higher for one industry and 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.

However, interest-payment obligations can have an adverse impact on 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.

Looking for stocks with low debt-to-equity ratios? Check out Benzinga Pro, a market research platform which provides investors with near-instantaneous access to dozens of stock metrics - including debt-to-equity ratio. Click here to learn more.

What Does L3Harris Technologies's Debt Look Like?
What Does L3Harris Technologies's Debt Look Like?

See more from Benzinga

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.