over the past three months shares of hershey inc hsy moved higher by 122 before having a look at the importance of debt lets look at how much debt hershey has according to the hersheys most recent balance sheet as reported on february 17 2023 total debt is at 479 billion with 334 billion in longterm debt and 145 billion in current debt adjusting for 46389 million in cashequivalents the company has a net debt of 433 billion lets define some of the terms we used in the paragraph above current debt is the portion of a companys debt which is due within 1 year while longterm debt is the portion due in more than 1 year cash equivalents includes cash and any liquid securities with maturity periods of 90 days or less total debt equals current debt plus longterm debt minus cash equivalents shareholders look at the debtratio to understand how much financial leverage a company has hershey has 1095 billion in total assets therefore making the debtratio 044 as a rule of thumb a debtratio more than 1 indicates that a considerable portion of debt is funded by assets a higher debtratio can also imply that the company might be putting itself at risk for default if interest rates were to increase however debtratios vary widely across different industries a debt ratio of 35 might be higher for one industry but average for another why shareholders look at debt debt is an important factor in the capital structure of a company and can help it attain growth debt usually has a relatively lower financing cost than equity which makes it an attractive option for executives interestpayment obligations can impact the cashflow of the company having financial leverage also allows companies to use additional capital for business operations allowing equity owners to retain excess profit generated by the debt capital looking for stocks with low debttoequity ratios check out benzinga pro a market research platform which provides investors with nearinstantaneous access to dozens of stock metrics  including debttoequity ratio click here to learn more this article was generated by benzingas automated content engine and reviewed by an editor