How Does Andersons's Debt Look?

Shares of Andersons ANDE moved higher by 33.72% in the past three months. Before we understand the importance of debt, let us look at how much debt Andersons has.

Start Futures Trading Fast — with a $200 Bonus

Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection.

Andersons's Debt

According to the Andersons’s most recent financial statement as reported on August 7, 2020, total debt is at $1.14 billion, with $975.97 million in long-term debt and $164.55 million in current debt. Adjusting for $30.01 million in cash-equivalents, the company has a net debt of $1.11 billion.

Investors look at the debt-ratio to understand how much financial leverage a company has. Andersons has $3.30 billion in total assets, therefore making the debt-ratio 0.35. As a rule of thumb, a debt-ratio more than one 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 25% might be higher for one industry and normal 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.