What Does Daxor's Debt Look Like?

Over the past three months, shares of Daxor Corporation Common Stock DXR fell by 9.17%. Before having a look at the importance of debt, let us look at how much debt Daxor Corporation Common Stock has.

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Daxor Corporation Common Stock's Debt

According to the Daxor Corporation Common Stock’s most recent balance sheet as reported on March 28, 2012, total debt is at $37.19 million, with $243.95 thousand in long-term debt and $36.95 million in current debt. Adjusting for $59.62 thousand in cash-equivalents, the company has a net debt of $37.13 million.

Shareholders look at the debt-ratio to understand how much financial leverage a company has. Daxor Corporation Common Stock has $85.72 million in total assets, therefore making the debt-ratio 0.43. Generally speaking, a debt-ratio more than one 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 and normal for another.

Importance Of 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.