Shares of Digital Brands Group Inc. (NASDAQ:DBGI) fell by 64.24% in the past three months. Before having a look at the importance of debt, let's look at how much debt Digital Brands Group has.

Digital Brands Group Debt

Based on Digital Brands Group's financial statement as of November 14, 2022, long-term debt is at $298 thousand and current debt is at $15.11 million, amounting to $15.40 million in total debt. Adjusted for $195 thousand in cash-equivalents, the company's net debt is at $15.21 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 includes 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 Investors 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.

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.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.