Market Overview

What Does John B Sanfilippo & Son's Debt Look Like?


Over the past three months, shares of John B Sanfilippo & Son Inc. (NASDAQ: JBSS) increased by 5.59%. Before having a look at the importance of debt, let's look at how much debt John B Sanfilippo & Son has.

John B Sanfilippo & Son's Debt

According to the John B Sanfilippo & Son’s most recent financial statement as reported on April 30, 2020, total debt is at $62.13 million, with $15.67 million in long-term debt and $46.46 million in current debt. Adjusting for $993.00 thousand in cash-equivalents, the company has a net debt of $61.14 million.

Shareholders look at the debt-ratio to understand how much financial leverage a company has. John B Sanfilippo & Son has $430.69 million in total assets, therefore making the debt-ratio 0.14. Generally speaking, a debt-ratio more than 1 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 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. 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.


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