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Over the past three months, shares of Express Inc. EXPR<\/span> fell by 17.38%. When understanding a companies price change over a time period like 3 months, it could be helpful to look at its financials. One key aspect of a companies financials is its debt, but before we understand the importance of debt, let’s look at how much debt Express has.<\/p>\n Based on Express’s balance sheet as of December 8, 2022, long-term debt is at $230.86 million and current debt is at $4.50 million, amounting to $235.36 million in total debt. Adjusted for $24.59 million in cash-equivalents, the company’s net debt is at $210.77 million.<\/p>\n Let’s define some of the terms we used in the paragraph above. Current debt<\/strong> is the portion of a company’s debt which is due within 1 year, while long-term debt<\/strong> is the portion due in more than 1 year. Cash equivalents<\/strong> includes cash and any liquid securities with maturity periods of 90 days or less. Total debt<\/strong> equals current debt plus long-term debt minus cash equivalents.<\/p>\n Shareholders look at the debt-ratio to understand how much financial leverage a company has. Express has $1.22 billion in total assets, therefore making the debt-ratio 0.19. As a rule of thumb, a debt-ratio more than 1 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, but average for another.<\/p>\n 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.<\/p>\n Interest-payment obligations can impact the cash-flow of the company. Having financial leverage also allows companies to use additional capital for business operations, allowing equity owners to retain excess profit, generated by the debt capital.<\/p>\n 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<\/a>.<\/p>\nExpress Debt<\/h2>\n
Importance of Debt<\/h2>\n