Financial Debt
What is Financial Debt?
Financial Debt is a company's non-operational debt. With low interest rates and a supply of lenders, debt in non-financial corporations has steadily risen in the past 15 years, benefitting some companies, but putting others at risk.Alternate names:
Gross Debt
How to calculate Financial Debt
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Sum(Long Term Debt + Current Portion Debt + Dividends Payable + Notes Payable)
Favourable trend
Less is better
Complexity level:
Beginner
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Date created: Feb 20, 2019
Latest update: May 15, 2019
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A company's non-operational debt may not be critical to a company’s operations. For example, notes payable are written obligations to creditors in exchange for funds and do not have an immediate impact on operations.
That being said, the structure of financial debt can be complex and may lead to serious consequences for the business.