Shares of G-III Apparel Group (NASDAQ:GIII) moved lower by 1.52% in the past three months. Before having a look at the importance of debt, let us look at how much debt G-III Apparel Group has.

G-III Apparel Group's Debt

Based on G-III Apparel Group's financial statement as of June 8, 2021, long-term debt is at $509.78 million and current debt is at $5.11 million, amounting to $514.89 million in total debt. Adjusted for $396.31 million in cash-equivalents, the company's net debt is at $118.58 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 Debt Is Important

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. 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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