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Long Term Debt

Department:

Finance

Long Term Debt

$

Calculation

Long Term Debt = Sum of all debts and financial obligations due after one year

DESCRIPTION

Long Term Debt refers to loans and financial obligations that are due for repayment more than one year from the date of the balance sheet.

Purpose

The purpose of Long Term Debt is to assess the amount of debt a company will not need to repay within the next year, which provides insights into the company’s long-term financial commitments and financing strategy.

Interpretation

Did you get it right

Optimal:
Indicates a manageable level of debt that aligns with the company’s growth strategy and capital investment plans, ensuring sustainable financial leverage.
Alert:
May suggest over-leverage, which could pose a risk to the company’s financial stability and affect its ability to raise more capital at favorable terms.
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06/15/2024 05:33:03 am