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Long-Term Debt & Capital Lease Obligation is the debt and capital lease obligation due more than 12 months in the future. China Automotive Systems's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $1.3 Mil.
Warning Sign:
China Automotive Systems Inc has been issuing new debt. Over the past 3 years, it issued USD 2.146 million of debt. But overall, its debt level is acceptable.
LT-Debt-to-Total-Asset is a measurement representing the percentage of a corporation's assets that are financed with loans and financial obligations lasting more than one year. The ratio provides a general measure of the financial position of a company, including its ability to meet financial requirements for outstanding loans. It is calculated as a company's Long-Term Debt & Capital Lease Obligation divides by its Total Assets. China Automotive Systems's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $1.3 Mil. China Automotive Systems's Total Assets for the quarter that ended in Dec. 2023 was $766.4 Mil. China Automotive Systems's LT-Debt-to-Total-Asset for the quarter that ended in Dec. 2023 was 0.00.
China Automotive Systems's LT-Debt-to-Total-Asset increased from Dec. 2022 (0.00) to Dec. 2023 (0.00). It may suggest that China Automotive Systems is progressively becoming more dependent on debt to grow their business.
The historical data trend for China Automotive Systems's Long-Term Debt & Capital Lease Obligation can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
China Automotive Systems Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Long-Term Debt & Capital Lease Obligation | Get a 7-Day Free Trial | 7.44 | 0.15 | 0.02 | 0.78 | 1.27 |
China Automotive Systems Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
Long-Term Debt & Capital Lease Obligation | Get a 7-Day Free Trial | 0.78 | - | - | - | 1.27 |
Long-Term Debt is the debt due more than 12 months in the future. The debt can be owed to banks or bondholders. Some companies issue bonds to investors and pay interest on the bonds.
Long-Term Capital Lease Obligation represents the total liability for long-term leases lasting over one year. It's amount equal to the present value (the principal) at the beginning of the lease term less lease payments during the lease term.
The interest paid on companies' debt is reflected in the income statement as interest expense. If a company has too much debt and it cannot serve the interest payment on the debt or repay the matured debt, the company risks bankruptcy. Peter Lynch famously said: A company that does not have debt cannot go bankrupt.
A company's long term debt may have different dates of maturity and interest rates, depending on the terms.
Usually a company issues long term debt to pay for its capital expenditures. Borrowing allows the company to do things that otherwise cannot be done with only the capital it has. But debt can be risky.
China Automotive Systems (NAS:CAAS) Long-Term Debt & Capital Lease Obligation Explanation
LT-Debt-to-Total-Asset is a measurement representing the percentage of a corporation's assets that are financed with loans and financial obligations lasting more than one year. The ratio provides a general measure of the financial position of a company, including its ability to meet financial requirements for outstanding loans. A year-over-year decrease in this metric would suggest the company is progressively becoming less dependent on debt to grow their business.
China Automotive Systems's LT-Debt-to-Total-Asset ratio for the quarter that ended in Dec. 2023 is calculated as:
LT-Debt-to-Total-Asset (Q: Dec. 2023 ) | = | Long-Term Debt & Capital Lease Obligation (Q: Dec. 2023 ) | / | Total Assets (Q: Dec. 2023 ) |
= | 1.273 | / | 766.44 | |
= | 0.00 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Buffett says that durable competitive advantages carry little to no long-term debt because the company is so profitable that even expansions or acquisitions are self financed.
We are interested in long term debt load for the last ten years. If the ten years of operation show little to no long term debt, then the company has some kind of strong competitive advantage.
Warren Buffett's historic purchases indicate that on any given year, the company should have sufficient yearly net earnings to pay all long term within 3 or 4 year earnings period. (e.g. Coke + Moody's = 1yr)
Companies with enough earning power to pay long term debt in less than 3 or 4 years is a good candidate in our search for long term competitive advantage.
BUT, these companies are targets for leveraged buy outs, which saddles the business with long term debt.
If all else indicates the company has a moat, but it has ton of debt, a leveraged buyout may have created the debt. In these cases the company's bonds offer the better bet, in that the companys earnings power is focused on paying off the debt and not growth.
Important: little or no long term debt often means a Good Long Term Bet
Thank you for viewing the detailed overview of China Automotive Systems's Long-Term Debt & Capital Lease Obligation provided by GuruFocus.com. Please click on the following links to see related term pages.
Jie Li | officer: Chief Financial Officer | HENGLONG BLDG., # 1 GUANSHAN 1ST ROAD, EAST LAKE HI-TECH ZONE, WUHAN F4 430073 |
Tong Kooi Teo | director | 08-05 GOODWOOD RESIDENCE, 261 BUKIT TIMAH ROAD, SINGAPORE U0 259703 |
Stanley Morgan | other: See Remarks Below | 1585 BROADWAY, NEW YORK NY 10036 |
Wong Arthur Lap Tat | director | C/O 27 UNION SQUARE WEST, SUITE 502, NEW YORK NY 10003 |
Wu Qizhou | director, officer: COO | |
Tse Yiu Wong | director | 4TH FL BLDG E NO 501, JEN GANG RD, SHANGHAI CHINA F4 9999999 |
Shengbin Yu | officer: Senior Vice President | HENGLONG BUILDING #1 GUANSHAN FIRST RD, EAST LAKE HI-TECH ZONE, WUHAN, HUBEI PROVINCE F4 430073 |
Liping Xie | other: Wife of Chairman | |
Haimian Cai | director | 3170 OTTER CREEK COURT, ANN ARBOR MI 48105 |
Hanlin Chen | director, 10 percent owner, officer: President and CEO | |
Shaobo Wang | officer: Senior Vice President | HENGLONG BUILDING #1 GUANSHAN FIRST RD, EAST LAKE HI-TECH ZONE, WUHAN, HUBEI PROVINCE F4 430073 |
Yijun Xia | officer: Vice President | NO. 1 HENGLONG ROAD, YUQIAO DEV. ZONE, SHASHI DISTRICT, JINGZHOU CITY, HUBEI PROVINCE F4 434000 |
Guangxun Xu | director | 17 WINDERMERE AVENUE, FINCHLEY, LONDON X0 N3 3QX |
Robert Tung | director | 1733 LEHAVRE DR, POTOMAC MD 20854 |
Daming Hu | officer: Chief Accountant |
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