What Does IDEXX Laboratories' Debt Look Like?

Shares of IDEXX Laboratories Inc. IDXX moved higher by 28.56% in the past three months. Before having a look at the importance of debt, let's look at how much debt IDEXX Laboratories has.

IDEXX Laboratories Debt

Based on IDEXX Laboratories's financial statement as of November 1, 2022, long-term debt is at $760.81 million and current debt is at $633.00 million, amounting to $1.39 billion in total debt. Adjusted for $99.18 million in cash-equivalents, the company's net debt is at $1.29 billion.

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.

Investors look at the debt-ratio to understand how much financial leverage a company has. IDEXX Laboratories has $2.64 billion in total assets, therefore making the debt-ratio 0.53. Generally speaking, a debt-ratio more than 1 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. For example, a debt ratio of 40% might be higher for one industry, but normal 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.

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.