Long Term Debt – Financial Statement Presentation

Long Term Debt is one of the multiple forms of capitalizing a business. It includes bonds, secured notes and mortgage notes. In the world of small business, the most common forms of long-term debt are secured notes, most likely with recourse. As an owner of a business you need to understand how this information is presented in your financial statements. In addition, there are various presentation formats and as the owner; you are free to use the one best suited to your needs.

The following sections explain total liabilities on the balance sheet and the traditional presentation format for liabilities. The next section identifies different reporting formats for long-term debt. The final section relates to the notes you may wish to include with your financial statements. Throughout this article, I’ll explain some analysis tools for the small business entrepreneur to use in evaluating long-term debt.

Total Liabilities

As a value investor, you need to key in on the terminology used when discussing debt. In general, all debt whether short-term or long-term is referred to

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