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Hello, have a couple quick questions:

Is interest expense debt, and should I add it to the debt that is listed on the balance sheet?

And what is "subordinated debt""?

Alot of times I come across things like the above and dont know if I should add them to the debt that is clearly listed, ("long-term debt" and/or "short-term debt"), or not b/c may have already been added.

Also, if a company says it has, say $5M in a bank-line of credit with a bank and they state that, "4M of it is unused." Does the 1M that IS being used and its interest count as any kind of debt and should it be added as such?

Thanks so much!
OI
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No. of Recommendations: 2
Hi Fooloi,

Is interest expense debt, and should I add it to the debt that is listed on the balance sheet?

Do not add interest expense to debt on the Balance Sheet.

And what is "subordinated debt""?

It's an unsecured bond, in which payment to the holder will occur only after designated senior bond holders are satisfied. (paraphrasing Foundations of Financial Management)

Also, if a company says it has, say $5M in a bank-line of credit with a bank and they state that, "4M of it is unused." Does the 1M that IS being used and its interest count as any kind of debt and should it be added as such?

It does mean that 1 million is being used. But do not add it anywhere - it's all accounted for on the Financial Statements.

Ryan








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