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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. Tronox Holdings's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $2,889 Mil.
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. Tronox Holdings's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2023 was $2,889 Mil. Tronox Holdings's Total Assets for the quarter that ended in Dec. 2023 was $6,134 Mil. Tronox Holdings's LT-Debt-to-Total-Asset for the quarter that ended in Dec. 2023 was 0.47.
Tronox Holdings's LT-Debt-to-Total-Asset increased from Dec. 2022 (0.41) to Dec. 2023 (0.47). It may suggest that Tronox Holdings is progressively becoming more dependent on debt to grow their business.
The historical data trend for Tronox Holdings'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.
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.
Tronox Holdings (NYSE:TROX) 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.
Tronox Holdings'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 ) |
= | 2889 | / | 6134 | |
= | 0.47 |
* 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 Tronox Holdings's Long-Term Debt & Capital Lease Obligation provided by GuruFocus.com. Please click on the following links to see related term pages.
Vanessa Ann Guthrie | director | 263 TRESSER BLVD., SUITE 1100, STAMFORD CT 06901 |
Stephen J Jones | director | 7201 HAMILTON BOULEVARD, ALLENTOWN PA 18195-1501 |
Mutlaq Hamad Al-morished | director | 263 TRESSER BLVD., SUITE 1100, STAMFORD CT 06901 |
Moazzam A. Khan | director | 263 TRESSER BLVD., SUITE 1100, STAMFORD CT 06901 |
Timothy C Carlson | officer: Senior Vice President, CFO | 263 TRESSER BOULEVARD, SUITE 1100, STAMFORD CT 06901 |
Jonathan Flood | officer: Principal Accounting Officer | 263 TRESSER BLVD., SUITE 1100, STAMFORD CT 06901 |
Jean Francois Turgeon | officer: Executive Vice President | 263 TRESSER BOULEVARD, STAMFORD CT 06901 |
John D Romano | officer: SVP, Chief Commercial Officer | P. O. BOX 268859, OKLAHOMA CITY OK 73126 |
Jeffrey N Neuman | officer: SVP, General Counsel & Sec. | 115 TABOR ROAD, MORRIS PLAINS NJ 07950 |
John Srivisal | officer: SVP, Business Dev. and Finance | C/O TRONOX HOLDINGS PLC, 263 TRESSER BOULEVARD, SUITE 1100, STAMFORD CT 06901 |
Sipho Abednego Nkosi | director | EXXARO RESOURCES LTD, P.O. BOX 9229, PRETORIA T3 0001 |
Raoul Charles Mancini | officer: SVP, Chief HR Officer | 410 PARK AVE.; SUITE 1400, NEW YORK NY 10022 |
Ilan Kaufthal | director | 143 E LINDEN AVE, ENGLEWOOD NJ 07631 |
Wayne A Hinman | director | TRONOX LIMITED, ONE STAMFORD PLAZA, 263 TRESSER BLVD., SUITE 1100, STAMFORD CT 06901 |
Jeffry N Quinn | director | 12935 NORTH FORTY DRIVE, SUITE 201, ST. LOUIS MO 63141 |
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