Brookfield Asset Mgmt: Debt Overview

Over the past three months, the actions of Brookfield Asset Management (NYSE:BAM) increased by 14.76%. Before understanding the importance of debt, let’s take a look at the debt amount of Brookfield Asset Mgmt.

Brookfield Asset Mgmt Debt

According to Brookfield Asset Mgmt’s balance sheet as at March 31, 2017, long-term debt stands at $ 63.96 billion and current debt at $ 4.50 billion, for a total of $ 68.46 billion. dollars. Adjusted for $ 4.30 billion in cash equivalents, the company’s net debt stands at $ 64.16 billion.

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 matures within one 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.

Shareholders look at the debt ratio to understand a company’s financial leverage. Brookfield Asset Mgmt has total assets of $ 159.83 billion, making the debt ratio of 0.43. 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. Having financial leverage also allows companies to use additional capital for their business operations, allowing stock owners to keep excess profits generated by debt capital.

Are you looking for stocks with a low debt ratio? Check out Benzinga Pro, a market research platform that gives investors near instant access to dozens of stock market metrics, including the debt ratio. Click here to find out more.

A look at Brookfield Asset Mgmt’s debt

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