Long-term Debt

What is Long-term Debt?

Long-term debt refers to loans and financial obligations that are not due within a year. These debts are recorded on the company's balance sheet and can include bonds, mortgages, and other long-term loans. They are essential for businesses to finance operations, growth, and acquisitions while preserving liquidity for immediate needs.

Short Description: Financial obligations that a company is required to pay back after more than one year.

• Types of Long-term Debt: Includes bonds, mortgage loans, and any other obligations due in over a year.
• Interest Costs: The cost a company incurs to service debt, which can affect profitability.
• Repayment Schedule: Structures the timing of principal and interest payments over the life of the debt.
• Impact on Credit Rating: Affects the company's ability to borrow in the future, based on the amount of debt maintained.

Long-term debt is a critical component of the capital structure, providing useful leverage for growth but also imposing financial discipline due to required repayments.