How do I calculate the long term debt?
To calculate Long-term debt, you should use a combination of equity and debt financing. Equity financing can be done through issuing common shares and preferred stock, while debt financing can be done through issuing debt securities like term loans and corporate bonds. The current portion of long term debt should be included in the current liabilities section of the balance sheet, while the non-current portion of long term debt should be included in the non-current liabilities section of the balance sheet. To calculate Long-term debt, you can use the following formula:
Long-term debt = Equity Financing + Debt Financing - Current Portion of Long-Term Debt - Non-Current Portion of Long-Term Debt
Using this formula, you can easily calculate your Long-term debt with programs such as Sourcetable
What are the risks associated with Long-term debt?
Long-term debt comes with collateral risks, including the risk of default or bankruptcy if the company is unable to keep up with its payments. Additionally, long-term debt limits a company's monthly cash flow.