What is American Independence Long-Term Debt & Capital Lease Obligation?
Long-Term Debt & Capital Lease Obligation is the debt and capital lease obligation due more than 12 months in the future. American Independence's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2016 was $2.0 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. American Independence's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2016 was $2.0 Mil. American Independence's Total Assets for the quarter that ended in Jun. 2016 was $321.1 Mil. American Independence's LT-Debt-to-Total-Asset for the quarter that ended in Jun. 2016 was 0.01.
American Independence Long-Term Debt & Capital Lease Obligation Historical Data
The historical data trend for American Independence'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.
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American Independence Long-Term Debt & Capital Lease Obligation Chart
American Independence Long-Term Debt & Capital Lease Obligation Calculation
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.
American Independence (NAS:AMIC) 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.
American Independence's LT-Debt-to-Total-Asset ratio for the quarter that ended in Jun. 2016 is calculated as:
* 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
American Independence Long-Term Debt & Capital Lease Obligation Related Terms
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American Independence (American Independence) Business Description
American Independence Corp is a Delaware corporation. The Company is an insurance holding Company, which provides specialized health coverage and related services to commercial customers and individuals. The Company focuses on niche health products and/or narrowly defined distribution channels in the United States. It's wholly owned subsidiary, Independence American Insurance Company, markets its products through IHC Risk Solutions, LLC, IHC Specialty Benefits, Inc., and IPA Family, LLC, which are subsidiaries of AMIC, and through independent brokers, producers and agents. Independence American is licensed to write property and/or casualty insurance in all 50 states and the District of Columbia, and has an A- (Excellent) rating from A.M. Best Company, Inc. Risk Solutions is a full-service direct writer of medical stop-loss insurance for self-insured employer groups. Risk Solutions has offices near Hartford, Connecticut and Philadelphia, Pennsylvania, and markets and underwrites employer medical stop-loss and group life mainly for Standard Security Life Insurance Company of New York. It also writes, to a much lesser extent, for three other carriers, including Madison National Life Insurance Company, Inc. and Independence American. Independence Holding Company and its subsidiaries including, among others, Standard Security Life and Madison National Life are collectively referred to as "IHC". Independence American writes group important medical, medical stop-loss, crucial medical plans for individuals and families, short-term medical, and dental, and began writing pet insurance in 2012.Independence American competes with many larger insurance and reinsurance companies and managed care organizations. Risk Solutions competes with many other managing general underwriters, insurance companies, and MCOs. AMIC is an insurance holding company; as such, AMIC and its subsidiaries are subject to regulation and supervision by multiple state insurance regulators, including the Office of the Insurance Commissioner of the State of Delaware.
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