Subscribe to Stock Researching via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Archives

Analyzing Potash Corporation’s Debt And Risk (POT:NYSE)

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 a key component in understanding the risk of a company, thus aiding in the 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 Potash Corporation’s (POT) total debt, total liabilities, debt ratios and WACC.

1. Total Debt = Long-Term Debt + Short-Term Debt

Debt is an amount of money borrowed by one party from another, and must be paid back. Total debt is the sum 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.

  • 2007 – $1.339 billion + $90 million = $1.429 billion
  • 2008 – $1.740 billion + $1.324 billion = $3.064 billion
  • 2009 – $3.319 billion + $729 million = $4.048 billion
  • 2010 – $3.702 billion + $1.871 billion = $5.573 billion
  • 2011 – $3.701 billion + $832 million = $4.533 billion

Potash Corp.’s total debt has increased significantly since 2007 but has decreased since 2010. In 2010, the company reported a total debt of $5.573 billion. In 2011, the company’s total debt was decreased to 4.533 billion. Over the past 5 years, Potash Corp.’s total debt has increased by 317.21%.

To read more: Analyzing Potash Corporation’s Debt And Risk

Leave a Reply