U.S. markets close in 26 minutes
  • S&P 500

    3,242.12
    -67.99 (-2.05%)
     
  • Dow 30

    26,243.98
    -415.13 (-1.56%)
     
  • Nasdaq

    10,840.35
    -345.24 (-3.09%)
     
  • Russell 2000

    1,531.53
    -30.05 (-1.92%)
     
  • Crude Oil

    35.43
    -0.74 (-2.05%)
     
  • Gold

    1,880.40
    +12.40 (+0.66%)
     
  • Silver

    23.70
    +0.34 (+1.46%)
     
  • EUR/USD

    1.1655
    -0.0023 (-0.20%)
     
  • 10-Yr Bond

    0.8600
    +0.0250 (+2.99%)
     
  • GBP/USD

    1.2955
    +0.0031 (+0.24%)
     
  • USD/JPY

    104.6670
    +0.0570 (+0.05%)
     
  • BTC-USD

    13,493.40
    +194.55 (+1.46%)
     
  • CMC Crypto 200

    263.70
    +0.07 (+0.03%)
     
  • FTSE 100

    5,577.27
    -4.48 (-0.08%)
     
  • Nikkei 225

    22,977.13
    -354.81 (-1.52%)
     

A Look Into Blackstone Group's Debt

Benzinga Insights
·2 mins read

Over the past three months, shares of Blackstone Group (NYSE: BX) fell by 8.53%. Before having a look at the importance of debt, let us look at how much debt Blackstone Group has.

Blackstone Group's Debt

Based on Blackstone Group’s financial statement as of August 10, 2020, long-term debt is at $10.84 billion and current debt is at $80.62 million, amounting to $10.92 billion in total debt. Adjusted for $2.32 billion in cash-equivalents, the company's net debt is at $8.60 billion.

Shareholders look at the debt-ratio to understand how much financial leverage a company has. Blackstone Group has $28.84 billion in total assets, therefore making the debt-ratio 0.38. 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 35% might be higher for one industry and normal 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, due to interest-payment obligations, cash-flow of a company can be impacted. 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.