U.S. Markets closed
  • S&P Futures

    4,166.25
    +6.25 (+0.15%)
     
  • Dow Futures

    34,172.00
    +54.00 (+0.16%)
     
  • Nasdaq Futures

    13,523.50
    +32.50 (+0.24%)
     
  • Russell 2000 Futures

    2,244.30
    +7.70 (+0.34%)
     
  • Crude Oil

    65.64
    +0.01 (+0.02%)
     
  • Gold

    1,786.60
    +2.30 (+0.13%)
     
  • Silver

    26.48
    -0.04 (-0.16%)
     
  • EUR/USD

    1.2013
    +0.0004 (+0.0360%)
     
  • 10-Yr Bond

    1.5840
    -0.0080 (-0.50%)
     
  • Vix

    19.15
    -0.33 (-1.69%)
     
  • GBP/USD

    1.3910
    +0.0002 (+0.0139%)
     
  • USD/JPY

    109.3340
    +0.1450 (+0.1328%)
     
  • BTC-USD

    56,818.29
    +1,977.88 (+3.61%)
     
  • CMC Crypto 200

    1,461.43
    +56.13 (+3.99%)
     
  • FTSE 100

    7,039.30
    +116.13 (+1.68%)
     
  • Nikkei 225

    29,387.74
    +575.11 (+2.00%)
     

eBay's Debt Overview

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

Shares of eBay (NASDAQ:EBAY) moved higher by 35.82% in the past three months. Before having a look at the importance of debt, let us look at how much debt eBay has.

eBay's Debt

Based on eBay's balance sheet as of October 29, 2020, long-term debt is at $7.74 billion and current debt is at $17.00 million, amounting to $7.75 billion in total debt. Adjusted for $963.00 million in cash-equivalents, the company's net debt is at $6.79 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.

Shareholders look at the debt-ratio to understand how much financial leverage a company has. eBay has $18.42 billion in total assets, therefore making the debt-ratio 0.42. 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 normal for another.

Why Shareholders Look At 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.

However, due to interest-payment obligations, cash-flow of a company can be impacted. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations.

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.

eBay's Debt Overview
eBay's Debt Overview

See more from Benzinga

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