What Does Nutrien's Debt Look Like?
Over the past three months, shares of Nutrien (NYSE:NTR) fell by nan%. Before having a look at the importance of debt, let us look at how much debt Nutrien has. Nutrien's Debt  Based on Nutrien's financial statement as of February 26, 2021, long-term debt is at $10.05 billion and current debt is at $173.00 million, amounting to $10.22 billion in total debt. Adjusted for $1.45 billion in cash-equivalents, the company's net debt is at $8.77 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, shareholders look at the debt ratio. Considering Nutrien's $47.19 billion in total assets, the debt-ratio is at 0.22. Generally speaking, a debt-ratio more than one means that a large portion of debt is funded by assets. As the debt-ratio increases, so the does the risk of defaulting on loans, if interest rates were to increase. Different industries have different thresholds of tolerance for debt-ratios. A debt ratio of 40% might be higher for one industry and average for another. Importance Of Debt  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. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations. 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.