over the past three months shares of leggett  platt inc leg decreased by 156 before having a look at the importance of debt lets look at how much debt leggett  platt has based on leggett  platts financial statement as of may 4 2023 longterm debt is at 211 billion and current debt is at 890 million amounting to 212 billion in total debt adjusted for 34450 million in cashequivalents the companys net debt is at 177 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 to understand the degree of financial leverage a company has investors look at the debt ratio considering leggett  platts 527 billion in total assets the debtratio is at 04 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 a debt ratio of 35 might be higher for one industry but average for another 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 however due to interestpayment obligations cashflow of a company can be impacted 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