What Does Reliance Steel & Aluminum's Debt Look Like?


Over the past three months, shares of Reliance Steel & Aluminum RS moved lower by 2.74%. Before having a look at the importance of debt, let us look at how much debt Reliance Steel & Aluminum has.

Reliance Steel & Aluminum's Debt

According to the Reliance Steel & Aluminum's most recent financial statement as reported on July 29, 2021, total debt is at $1.65 billion, with $1.64 billion in long-term debt and $5.30 million in current debt. Adjusting for $727.60 million in cash-equivalents, the company has a net debt of $918.30 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.

To understand the degree of financial leverage a company has, investors look at the debt ratio. Considering Reliance Steel & Aluminum's $8.93 billion in total assets, the debt-ratio is at 0.18. 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 35% might be higher for one industry and average 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.

Interest-payment obligations can impact the cash-flow of the company. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations.

Looking for stocks with low debt-to-equity ratios? Check out Benzinga Pro, a market research platform which provides investors with near-instantaneous access to dozens of stock metrics - including debt-to-equity ratio. Click here to learn more.


What Does Reliance Steel & Aluminum's Debt Look Like?


Market News and Data brought to you by Benzinga APIs
Posted In: NewsMarketsBZI-Debt
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!