Total Debt
Adds interest-bearing short-term and long-term borrowings owed by the company.
Formula
Total Debt = Short-Term Borrowings + Current Debt + Long-Term Debt
Worked example$0.6 billion of short-term borrowings plus $4.0 billion of long-term debt gives total debt of $4.6 billion.
Calculation steps
- Find short-term and current borrowings: $0.6 billion.
- Find long-term debt: $4.0 billion.
- Add them to get $4.6 billion of total debt.
How to interpret it
Debt is not automatically harmful; risk depends on interest cost, maturity timing, covenants, and the cash flow available to service it.
Industry context
Utilities, real estate, banks, and asset-heavy companies often carry more debt than asset-light firms, so industry norms matter.
Common mistakes
- Do not mix lease liabilities with debt inconsistently.
- Review gross debt, net debt, and maturities.
- Check off-balance-sheet obligations and guarantees.