Current Portion of Long-Term Debt


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Current Portion of Long-Term Debt

On a balance sheet, the part of a company's long-term debt that must be paid within a year. The current portion of long-term debt is a liability and is recorded on the balance sheet separately from current liabilities and long-term liabilities. Investors may add the current portion of long-term debt to the current liabilities and compare them to current cash flow to determine if the company is at risk of default. A high amount of current portion of long-term debt compared to poor cash flow is considered a sign of poor financial health.
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Exhibit 1 The Current Portion of Fixed Assets Approach Current asset: Cash $200 Current portion of fixed assets (CPFA) $5,000 Fixed asset: Taxi value (long-term portion) $20,000 Total assets $25,200 Current liabilities $0 Current portion of long-term debt (CPLTD) $4,000 Long-term loan (long-term portion) $16,000 Equity $5,200 Total liabilities + equity $25,200
( 9) The current portion of long-term debt is included along with the noncurrent portion throughout the paper.
The company had IDR528 billion of unrestricted cash at end-2017, against the current portion of long-term debt of IDR954 billion.
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