Graphic Packaging Debt Overview | Benzinga


During the past three months, the actions of Holding graphic packaging (NYSE: GPK) rose 10.19%. Before looking at the importance of debt, let’s take a look at the amount of debt that Graphic Packaging Holding holds.

Debt of Graphic Packaging Holding

Based on Graphic Packaging Holding’s balance sheet as of July 27, 2021, long-term debt stands at $ 3.74 billion and current debt at $ 20.00 million, for a total of $ 3.76 billion. dollars. Adjusted for $ 89.00 million in cash equivalents, the company’s net debt stands at $ 3.67 billion.

Let’s define some of the terms we used in the paragraph above. Short-term debt is the portion of a company’s debt that is owed less than a year, while long-term debt is the portion over one year. Cash equivalents include cash and all liquid securities with maturity periods of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

Investors look at the debt ratio to understand a company’s financial leverage. Graphic Packaging Holding has total assets of $ 7.84 billion, making the debt ratio of 0.48. Typically, a debt ratio greater than one indicates that a considerable amount of debt is financed by assets. A higher debt ratio can also mean that the company could default if interest rates were to rise. However, debt ratios vary considerably from sector to sector. A debt ratio of 25% may be higher for one industry and average for another.

Why are investors interested in debt?

Besides equity, debt is an important factor in a company’s capital structure and contributes to its growth. Due to its lower cost of financing compared to equity, it becomes an attractive option for executives trying to raise capital.

However, due to interest payment obligations, a company’s cash flow can be affected. Having financial leverage also allows companies to use additional capital for their business operations, allowing stock owners to keep excess profits generated by debt capital.

Are you looking for stocks with a low debt ratio? Check out Benzinga Pro, a market research platform that gives investors near instant access to dozens of stock market metrics, including the debt ratio. Click here to find out more.

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