Interest rate expenses at many companies is increasing,... To understand the impact of rising interest rates on a companies’ balance sheet, it’s important to read the debt-related disclosures. Within the footnotes you can find companies’ debt instruments, including interest rates and due dates.
NEW YORK (PRWEB) April 24, 2023
Calcbench, the leading interactive financial research platform for data-intensive analysts, announced the release of two corporate debt reports examining the winners and losers of rising interest rates. These reports follow a January 2022 study that identified total debt for non-financial firms in the S&P 500 increased from $4.05 trillion in 2016 to $5.49 trillion in 2021, an increase of 36 percent.
“Interest rate expenses at many companies is increasing, in some cases significantly. To understand the impact of rising interest rates on a companies’ balance sheet, it’s important to read the debt-related disclosures,” says Pranav Ghai, co-founder and CEO of Calcbench. “Within the footnotes you can find companies’ debt instruments, including interest rates and due dates.”
As the Wall Street Journal notes, the burden of higher interest rates hasn’t been felt yet. Some firms will reduce their debt loads, or issue equity. For those companies that will need to refinance at higher rates, the effect could be material.
In March, Calcbench analyzed 75 non-financial S&P 500 companies that already filed their 2022 annual reports, and found that the debt maturing in 2023 amounted to $73.6 billion. Calcbench highlights several companies with debt due this year, including CVS, Gilead, Pepsi, and Thermo Fisher, where rolling over their debt at higher interest rates will put pressure on the balance sheet. The report also finds that more than 13 percent of the companies analyzed had an annual interest expense that exceeded 45 percent of net income — so even higher interest expenses, thanks to higher rates, could squeeze net income significantly.
In its latest corporate debt report, Calcbench explores companies with the most new debt, as well as corporates that borrowed long-term at low interest rates. Amazon, Boeing, and Salesforce, for example, raised billions in debt since 2017, and locked in that financing at low single-digit rates. These companies positioned themselves well for interest rate volatility.
To access standardized metrics such as short-term debt, long-term debt, total debt (short & long term), floating rate debt, Interest payable, and interest expense, visit Calcbench’s multi-company page. You can also find ratios including debt to equity, debt to EBITDA, and more.
About Calcbench
Calcbench is a financial data platform designed for outperformance. Founded in 2011, the company uses the latest technology to offer instant and systematic access to all the data (numbers and text) in financial statements, including the details hidden within the footnotes. Developed by former analysts and supported by a team of financial experts, Calcbench was built for data analysis looking to go deeper. Visit http://www.calcbench.com to learn more.