A company’s debt, liabilities and risk are very important factors in understanding the company. Having an understanding of a company’s debt and liabilities is key component in understanding the risk of a company, thus helping aid in a decision to invest, not to invest or to stay invested in a company. There are many metrics involved in understanding the debt of a company, but for this article, I will look at Joy Global’s (JOY) total debt, total liabilities, debt ratios and WACC.
Through the above-mentioned four main metrics, we will understand more about the company’s debt, liabilities and risk. If this summary is compared with other companies in the same sector, you will be able see which who has the most debt and the most risk.
1. Total Debt = Long Term Debt + Short Term Debt
A debt is an amount of money borrowed by one party from another, and must be paid back. Total debt is the addition of long-term debt, which is debt that is due in one year or more, and short-term debt, which is any debt that is due within one year. The combination of the two is total debt.
- 2007 – $396.26 million + $0.24 million = $396.50 million
- 2008 – $540.97 million + $26.46 million = $567.43 million
- 2009 – $523.89 million + $19.79 million = $543.68 million
- 2010 – $396.33 million + $1.55 million = $397.88 million
- 2011 – $1.356,41 billion + $35.9 million = $1.392,31 billion
Joy Global’s total debt the amount has increased from 396.50 million in 2007 to $1.392,31 billion in 2011 or by 351%.
To read more… Joy Global: Debt And Risk