Market Overview

Albemarle's Debt Overview


Over the past three months, shares of Albemarle (NYSE: ALB) moved higher by 6.85%. Before having a look at the importance of debt, let us look at how much debt Albemarle has.

Albemarle's Debt

Based on Albemarle’s financial statement as of August 5, 2020, long-term debt is at $3.13 billion and current debt is at $406.20 million, amounting to $3.54 billion in total debt. Adjusted for $736.70 million in cash-equivalents, the company's net debt is at $2.80 billion.

Investors look at the debt-ratio to understand how much financial leverage a company has. Albemarle has $10.17 billion in total assets, therefore making the debt-ratio 0.35. 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 25% might be higher for one industry and average 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.

However, due to interest-payment obligations, cash-flow of a company can be impacted. 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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