 Over the past three months, shares of Forward Industries Inc. NASDAQ: FORD moved higher by 57.36. Before we understand the importance of debt, lets look at how much debt Forward Industries has.Forward Industriess Debt Based on Forward Industriess financial statement as of June 25, 2020, long-term debt is at 10.59 thousand and current debt is at 2.05 million, amounting to 2.06 million in total debt. Adjusted for 1.35 million in cash-equivalents, the companys net debt is at 709.92 thousand.Shareholders look at the debt-ratio to understand how much financial leverage a company has. Forward Industries has 16.18 million in total assets, therefore making the debt-ratio 0.13. As a rule of thumb, a debt-ratio more than 1 indicates that a considerable portion of debt is funded by assets. A higher debt-ratio can also imply that the company might be putting itself at risk for default, if interest rates were to increase. However, debt-ratios vary widely across different industries. A debt ratio of 40 might be higher for one industry, whereas average for another.Why Debt Is Important Besides equity, debt is an important factor in the capital structure of a company, and contributes to its growth. Due to its lower financing cost compared to equity, it becomes an attractive option for executives trying to raise capital.However, interest-payment obligations can have an adverse impact on the cash-flow of the company. Equity owners can keep excess profit, generated from the debt capital, when companies use the debt capital for its business operations.See more from Benzinga Stocks That Hit 52-Week Highs On MondayC 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. 