Total debt, on a balance sheet, is the total amount of borrowed money that a company has on its balance sheet. The total debt number is sum of the current and the non current debts that the company has. From accounting perspective, the debt might be in different forms like bonds, commercials papers, credit facilities, lines of credits etc.
The formula for calculating Long term debt is simple and it calculated aster sum of long term debts and short terms debts:
Total Debt = Long Term Debts + Short Term debts
Where current debt is segment from current liabilities and represents debt that is generally due to be paid back in less than 12 months. Long Term debt is debt that has longer than 12 months due date. Both can be found on the company balance sheet.
Different companies in different industries can have very different debt profiles. There are some industries that are very capital intensive where having large amounts of debt is considered normal while a similar size company in different industry with the same amount of debt might be considered excessive. Debt can be used to improve and help company grow but also when excessive amount of debt is used can makes a company very risky.
|Name||Debt to equity||Marketcap||Industry|
|BKD Brookdale Senior Living Inc||9.89||$1.01B||Medical Care Facilities|
|AES Aes Corp||9.86||$12.14B||Utilities - Diversified|
|MITT AG Mortgage Investment Trust Inc||9.76||$110.08M||REIT - Mortgage|
|RDI Reading International Inc||9.76||$41.21M||Entertainment|
|EFC Ellington Financial Inc||9.63||$895.23M||Mortgage Finance|
|CPSS Consumer Portfolio Services Inc||9.6||$193.25M||Credit Services|
|ORC Orchid Island Capital Inc||9.48||$402.44M||REIT - Mortgage|
Long term and short term debt are provided by financial institutions and banks. Companies use debt for different reasons, to finance their operations, invest in growth, to buy other businesses etc. When assessing the financial health of a given company, analysts can use different metrics to determine if the level of debt (or leverage) the company uses to fund operations is within a healthy range.