How Does Quest Diagnostics's Debt Look?

Shares of Quest Diagnostics Inc. DGX increased by 6.20% in the past three months. Before having a look at the importance of debt, let's look at how much debt Quest Diagnostics has.

Invest in Real Estate with as Little as $10

Arrived Homes
Invest in rental properties starting from $100
Open to all investors — no accreditation required
Receive quarterly dividends and benefit from appreciation
Professionally managed properties, no landlord headaches
Fundrise
Low minimum investment starting from $10
Professionally managed, hands-off investing experience
Easy-to-use platform for investors of all experience levels
Passive income through quarterly dividends and appreciation
Yieldstreet
Minimum investment starting from $2,500
Invest in real estate, private credit, art, and more
Access alternative investments previously reserved for institutions
Simple platform designed for accredited and non-accredited investors
EquityMultiple
Minimum investment starting at just $5,000
Invest across diverse commercial real estate assets
Targeted returns clearly presented for informed investing
Professionally vetted deals designed for accredited investors
RealtyMogul
Minimum investment starting from $5,000
Invest in professionally vetted real estate projects and REITs
Earn potential passive income through dividends and appreciation
Open to accredited and select options for non-accredited investors

Quest Diagnostics's Debt

Based on Quest Diagnostics’s financial statement as of July 24, 2020, long-term debt is at $4.02 billion and current debt is at $555.00 million, amounting to $4.58 billion in total debt. Adjusted for $988.00 million in cash-equivalents, the company's net debt is at $3.59 billion.

To understand the degree of financial leverage a company has, shareholders look at the debt ratio. Considering Quest Diagnostics’s $12.99 billion in total assets, the debt-ratio is at 0.35. 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 35% might be higher for one industry, whereas average for another.

Why Shareholders Look At Debt?

Debt is an important factor in the capital structure of a company, and can help it attain growth. Debt usually has a relatively lower financing cost than equity, which makes it an attractive option for executives.

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.