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Total debt

Every interest-bearing borrowing added together, short and long term, before subtracting any cash. The starting point for leverage analysis.

Total debt is short-term-debt plus long-term-debt, and most analysts add finance and operating lease obligations, because a lease commits the company to fixed payments exactly as a loan does. Trade payables are not debt.

Rating agencies and lenders work from gross debt because cash can be spent, while debt cannot be wished away. Equity investors prefer net-debt. Both views are defensible; state which one you are using.

Example: Northwind Tools has $60M short-term plus $430M long-term plus $130M of lease obligations, so total debt is $620M against $195M of ebitda, a gross ratio of 3.2 times.

Related: net-debt, net-debt-to-ebitda, long-term-debt, operating-lease-liability, debt-to-equity

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