United Rentals, Inc. (URI)

United Rentals's Debt Overview

Over the past three months, shares of United Rentals (NYSE: URI) moved higher by 21.08%. Before having a look at the importance of debt, let us look at how much debt United Rentals has.United Rentals's Debt According to the United Rentals's most recent balance sheet as reported on July 29, 2020, total debt is at $10.40 billion, with $9.60 billion in long-term debt and $806.00 million in current debt. Adjusting for $127.00 million in cash-equivalents, the company has a net debt of $10.28 billion.Shareholders look at the debt-ratio to understand how much financial leverage a company has. United Rentals has $17.90 billion in total assets, therefore making the debt-ratio 0.58. 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 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, 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 * Stocks That Hit 52-Week Highs On Tuesday * Stocks That Hit 52-Week Highs On Monday * Stocks That Hit 52-Week Highs On Friday(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.