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Red Hat Inc (NYSE:RHT)
Cash to Debt Ratio
1.77 (As of Feb. 2015)

Cash to Debt Ratio measures the financial strength of a company. It is calculated as a company's cash and cash equivalents divide by its debt. Red Hat Inc's cash to debt ratio for the quarter that ended in Feb. 2015 was 1.77.

If Cash to Debt ratio is greater than 1, the company can pay off its debt using the cash in hand. Here we can see, Red Hat Inc could pay off its debt using the cash in hand for the quarter that ended in Feb. 2015.

RHT' s 10-Year Cash to Debt Range
Min: 0.54   Max: No Debt
Current: 1.77

During the past 13 years, Red Hat Inc's highest Cash to Debt Ratio was No Debt. The lowest was 0.54. And the median was 14.00.

RHT's Cash to Debtis ranked higher than
57% of the 2690 Companies
in the Global Software - Application industry.

( Industry Median: 11.15 vs. RHT: 1.77 )

Definition

This is the ratio of a company's Cash and cash equivalents to its debt. The debt includes the Current Portion of Long-Term Debt and Long-Term Debt. This ratio measures the financial strength of a company. This ratio is updated quarterly.

Red Hat Inc's Cash to Debt Ratio for the fiscal year that ended in Feb. 2015 is calculated as:

Cash to Debt Ratio=Cash and Cash Equivalents / Total Debt
=Cash and Cash Equivalents / (Short-Term Debt + Long-Term Debt)
=1262.727 / (0 + 715.402)
=1.77

Red Hat Inc's Cash to Debt Ratio for the quarter that ended in Feb. 2015 is calculated as:

Cash to Debt Ratio=Cash and Cash Equivalents / Total Debt
=Cash and Cash Equivalents / (Short-Term Debt + Long-Term Debt)
=1262.727 / (0 + 715.402)
=1.77

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

If Cash to Debt ratio is greater than 1, the company can pay off its debt using the cash in hand. If it is smaller than 1, it means the company has more debt than the cash in hands. In this case, it is important to look the the company's Interest Coverage. Ben Graham requires that a company must have an Interest Coverage of at least 5.


Related Terms

Current Portion of Long-Term Debt, Long-Term Debt, Cash and Cash Equivalents (For Banks and Insurance Companies), Cash and Cash Equivalents, Interest Coverage


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Red Hat Inc Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
cash2debt 1.411.541.74No Debt866.491,324.0026.54No DebtNo Debt1.77

Red Hat Inc Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
cash2debt No DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo DebtNo Debt1.571.77
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