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.

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.