Debt can be an important part of capital structure for large companies, assisting in overall growth. It typically has lower financing than equity, making it popular among some of the biggest corporations in the country, and even in the world.
Itron’s share (NASDAQ:ITRI) has decreased by 9.22% over the recent few months. Based on reports released in early May, their long-term debt sits at $496.53 million, while their current debt (amount of debt due within one year) is $400 million, making for a total of $896.53 million in total debt. If adjusted for cash equivalents (cash and liquid securities with a maturity period of 90 days or less), it would be $574.59, making the net debt $321.94 million.
With $2.93 billion in total assets, their debt ratio is 0.31. Higher debt ratios can be a strong indicator that most of the debt is funded by assets and imply that a company may be at risk for default if interest rates begin to increase.
Interest payment obligations can impact the cash flow a company has involving their debt. Equity owners may keep excess profit pulled out from their debt capital when used for operations as it pertains to the line of business.
It is not uncommon for large companies to have massive amounts of debt, but whether this is a good or bad debt and asset component depends on market behavior and the overall economy.
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