Definition
Long-term debt includes bonds, term loans, and mortgages maturing beyond one year. It's a major component of capital structure. While debt provides tax benefits and amplifies returns, excessive debt increases financial risk and interest burden.
Formula
Debt-to-Equity = Total Debt / Shareholders' Equity
Example
A company with $100M long-term debt, $20M short-term debt, and $150M equity has debt-to-equity of 0.8x ($120M/$150M), moderate leverage.
FAQ
What is Long-Term Debt?
Debt obligations due more than one year in the future.
How do you calculate Long-Term Debt?
A common formula for Long-Term Debt is: Debt-to-Equity = Total Debt / Shareholders' Equity
Why is Long-Term Debt important?
Long-Term Debt helps investors evaluate financial statements and make more informed decisions.