Over the past three months, shares of Dycom Industries (NYSE:DY) increased by 0.73%. Before we understand the importance of debt, let us look at how much debt Dycom Industries has.

Dycom Industries's Debt

Based on Dycom Industries's balance sheet as of May 26, 2021, long-term debt is at $835.18 million and current debt is at $61.52 million, amounting to $896.70 million in total debt. Adjusted for $330.62 million in cash-equivalents, the company's net debt is at $566.09 million.

Let's define some of the terms we used in the paragraph above. Current debt is the portion of a company's debt which is due within 1 year, while long-term debt is the portion due in more than 1 year. Cash equivalents include cash and any liquid securities with maturity periods of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

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.

However, interest-payment obligations can have an adverse impact on 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.

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