Micron Technology Inc stock mu up 4.26% over the past three months. To understand a company’s price action over a period of about 3 months, it can be helpful to look at its financials. An important aspect of a company’s finances is its debt, but before we understand the meaning of debt, let’s look at how much debt Micron Technology has.

Micron technology debt

Based on Micron Technology’s balance sheet as of December 22, 2022, long-term debt is $10.09 billion and current debt is $171.00 million for total debt of $10.27 billion . Adjusted for $9.57 billion in cash, the company’s net debt is $691.00 million.

Let’s define some of the terms we used in the paragraph above. Current Debt is that portion of a company’s debt that falls due within one year, during Long-term liabilities is the portion due in more than 1 year. cash equivalents includes cash and all liquid securities with maturities of 90 days or less. total debt equals current liabilities plus non-current liabilities minus cash equivalents.

Shareholders look at the leverage ratio to understand how much financial leverage a company has. Micron Technology has total assets of $67.87 billion, which translates to a debt ratio of 0.15. In general, a debt ratio greater than 1 means that a large portion of the debt is funded by assets. As the debt ratio increases, so does the risk of default on a loan when interest rates rise. Different industries have different tolerance levels for debt ratios. For example, a 25% debt ratio may be higher for one industry but normal for another.

Why Debt Matters

Debt is an important factor in a company’s capital structure and can contribute to growth. Debt typically has relatively lower funding costs than equity, making it an attractive option for executives.

Interest payment obligations may affect the company’s cash flow. Financial leverage also allows companies to use additional capital to operate the business,…