eBay’s Debt Overview | Benzinga

 

Over the previous three months, shares of eBay (NASDAQ:EBAY) moved decrease by 8.37%. Earlier than we perceive the significance of debt, allow us to take a look at how a lot debt eBay has.

eBay’s Debt

Based mostly on eBay’s monetary assertion as of October 29, 2020, long-term debt is at $7.74 billion and present debt is at $17.00 million, amounting to $7.75 billion in complete debt. Adjusted for $963.00 million in cash-equivalents, the corporate’s web debt is at $6.79 billion.

Let’s outline a number of the phrases we used within the paragraph above. Present debt is the portion of an organization’s debt which is due inside 1 yr, whereas long-term debt is the portion due in additional than 1 yr. Money equivalents embrace money and any liquid securities with maturity durations of 90 days or much less. Complete debt equals present debt plus long-term debt minus money equivalents.

Buyers take a look at the debt-ratio to grasp how a lot monetary leverage an organization has. eBay has $18.42 billion in complete belongings, due to this fact making the debt-ratio 0.42. As a rule of thumb, a debt-ratio multiple signifies {that a} appreciable portion of debt is funded by belongings. A better debt-ratio also can suggest that the corporate is perhaps placing itself in danger for default, if rates of interest had been to extend. Nonetheless, debt-ratios fluctuate extensively throughout totally different industries. A debt ratio of 40% is perhaps larger for one business and regular for an additional.

Why Debt Is Essential

Moreover fairness, debt is a vital issue within the capital construction of an organization, and contributes to its progress. As a result of its decrease financing price in comparison with fairness, it turns into a beautiful possibility for executives attempting to lift capital.

Nonetheless, interest-payment obligations can have an antagonistic affect on the cash-flow of the corporate. Having monetary leverage additionally permits corporations to make use of extra capital for enterprise operations, permitting fairness house owners to retain extra revenue, generated by the debt capital.

In search of shares with low debt-to-equity ratios? Try Benzinga Professional, a market analysis platform which supplies buyers with near-instantaneous entry to dozens of inventory metrics – together with debt-to-equity ratio. Click on right here to study extra.

 

eBay's Debt Overview

 

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