Market Overview

Novavax's Debt Overview


Shares of Novavax Inc. (NASDAQ: NVAX) increased by 503.81% in the past three months. Before having a look at the importance of debt, let's look at how much debt Novavax has.

Novavax's Debt

Based on Novavax’s balance sheet as of May 11, 2020, long-term debt is at $320.97 million and current debt is at $2.03 million, amounting to $323.00 million in total debt. Adjusted for $179.88 million in cash-equivalents, the company's net debt is at $143.12 million.

To understand the degree of financial leverage a company has, investors look at the debt ratio. Considering Novavax’s $328.07 million in total assets, the debt-ratio is at 0.98. As a rule of thumb, a debt-ratio more than 1 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, whereas average for another.

Why Investors Look At 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.

Interest-payment obligations can impact the cash-flow of the company. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations.


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