Market Overview

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

Share:

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.

 

Related Articles (JBSS)

View Comments and Join the Discussion!

Posted-In: Debt InsightsNews Intraday Update Markets