Company does not tell the share of interest bearing debt


A company reports long-term and short-term debt, but not how they are divided into interest and non-interest bearing debt.

Even though there would be no information about the interest bearing debt in the balance sheet, the company usually tells the total interest bearing debt or the net debt in the texts of interim report or fiscal year announcement. Using these parameters you are able to estimate the needed values. So you should search (Ctrl+F) for these terms in the text.

Long-term debt

If you get the net debt figure, simply add cash & equivalents (from the assets' side) to it in order to have total interest bearing liabilities.

Interest bearing debt = Net debt + Cash & cash equivalents

Then it is reasonable to assume that all the long-term liabilities are interest bearing. And what remains from them, can be allocated to short-term debt.

Short-term debt = Interest bearing debt - Long-term debt

On the other hand, you may directly find total interest bearing debt. Again, assume that all long-term debt is interest bearing and allocate the rest to the short-term debt.

Short-term liabilities

The part of total short-term debt that is thus not allocated to short-term interest bearing debt can be allocated to short-term non-interest bearing liabilities.

This allocation would perhaps not be exactly true, but it is fair enough because the most important thing is that total interest bearing debt is correct even though the allocation of them to short-term and long-term would be a bit inaccurate.

Detailed information in notes

Often the more detailed information can be found from "notes to the financial statements" which can be found from the annual report only. Thus normally from late January up till mid-March there is only rough information available from the balance sheet items and the analyst has to do some assumptions, which can be later on refined with annual report information.