US Xpress Companies: Debt Overview



During the past three months, the actions of American companies Xpress (NYSE: USX) rose 4.77%. Before understanding the importance of debt, let’s take a look at the amount of debt of US Xpress Enterprises.

US Xpress Enterprises Debt

According to US Xpress Enterprises’ most recent balance sheet released on July 30, 2021, total debt stands at $ 339.20 million, with $ 256.71 million in long-term debt and $ 82.49 million in long-term debt. current debt. Adjusted for $ 5.28 million in cash equivalents, the company has net debt of $ 333.92 million.

Let’s define some of the terms we used in the paragraph above. Short-term debt is the portion of a company’s debt that is owed less than a year, while long-term debt is the portion over one year. Cash equivalents include cash and all liquid securities with maturity periods of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

To understand a company’s degree of financial leverage, investors look at the debt ratio. Considering US Xpress Enterprises’ total assets of $ 1.18 billion, the debt ratio is 0.29. Typically, a debt ratio greater than one indicates that a considerable amount of debt is financed by assets. A higher debt ratio can also mean that the company could default if interest rates were to rise. However, debt ratios vary considerably from sector to sector. A debt ratio of 25% may be higher for one industry and normal for another.

Significance of debt

Debt is an important factor in a company’s capital structure and can help it achieve growth. Debt generally has a relatively lower cost of financing than equity, making it an attractive option for executives.

However, interest payment obligations can have a negative impact on the company’s cash flow. Stock owners can keep excess profits, generated by debt capital, when companies use debt capital for their business operations.

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