How do you calculate the current portion of long-term debt?
Understand the Problem
The question is asking how to determine the current portion of long-term debt, which is typically a financial analysis concept. To calculate this, we need to identify the total long-term debt amount and determine how much of that debt is due within the next year. This involves looking at the debt repayment schedule and identifying the installments that are payable within the current operating cycle.
Answer
The total principal payments due within the next twelve months.
The final answer is the total principal payments due within the next twelve months of the long-term loan.
Answer for screen readers
The final answer is the total principal payments due within the next twelve months of the long-term loan.
More Information
The current portion of long-term debt (CPLTD) is important for financial analysis as it helps in assessing a company's short-term liquidity and ability to meet its debt obligations.
Tips
A common mistake is forgetting to include all loan payments due within the next twelve months, including any balloon payments.
Sources
- The web page with info on - Example Source - redwingsoftware.com
- What Is the Current Portion of Long-Term Debt (CPLTD)? - investopedia.com
- What is the current portion of long-term debt is and how to calculate it. - loanuniverse.com
