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Effective Debt
(redirected from Effective Debts)

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Effective debt
The total debt owed by a firm to its creditors.

Effective Debt
The total debt of a company plus the value of its lease payments. Effective debt helps potential investors and lenders determine the ongoing expenses of a company due to debt service and similar costs. If the effective debt rises above a certain level, the company is unlikely to be profitable because of a low net cash flow.


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