over the past three months shares of biogen inc biib decreased by 779 before having a look at the importance of debt lets look at how much debt biogen has according to the biogens most recent balance sheet as reported on february 15 2023 total debt is at 628 billion with 628 billion in longterm debt and 0 in current debt adjusting for 342 billion in cashequivalents the company has a net debt of 286 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 biogen has 2455 billion in total assets therefore making the debtratio 026 generally speaking a debtratio more than 1 means that a large portion of debt is funded by assets as the debtratio increases so the does the risk of defaulting on loans if interest rates were to increase different industries have different thresholds of tolerance for debtratios for example a debt ratio of 40 might be higher for one industry but normal for another besides equity debt is an important factor in the capital structure of a company and contributes to its growth due to its lower financing cost compared to equity it becomes an attractive option for executives trying to raise capital interestpayment obligations can impact the cashflow of the company equity owners can keep excess profit generated from the debt capital when companies use the debt capital for its business operations 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