fixed debt
Generally, a permanent form of debt commonly evidenced by a bond or debenture; long-term debt. — Also termed fixed liability.
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debt ratio
debt ratio. A corporation’s total long-term and short-term liabilities divided by the firm’s total assets. • A low debt ratio indicates conservative financing and thus usu. an enhanced ability to borrow in the future. — Also termed debt-to-total-assets ratio.
debt to equity ratio
debt-to-equity ratio. A corporation’s long-term debt divided by its owners’ equity, calculated to assess its capitalization. — Also termed debt-equity ratio; debt-to-net-worth ratio.
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debt service
debt service. 1. The funds needed to meet a long-term debt’s annual interest expenses, principal payments, and sinking-fund contributions. 2. Payments due on a debt, including interest and principal.
funding
funding, n. 1. The process of financing capital expenditures by issuing long-term debt obligations or by converting short-term obligations into long-term obligations to finance current expenses; the process of creating a funded debt. 2. The refinancing of a debt before its maturity. — Also termed refunding. 3. The provision or allocation of money for a
asset coverage test
asset-coverage test. Accounting. A bond-indenture restriction that permits additional borrowing only if the ratio of assets (typically net tangible assets) to debt (typically long-term debt) does not fall below a specified minimum.
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sinking fund debenture
A debenture that is secured by periodic payments into a fund established to retire long-term debt.
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treasury bond
Treasury bond. A long-term debt security issued by the federal government, with a maturity of 10 to 30 years. • These bonds are considered risk-free, but they usu. pay relatively little interest. — Abbr. T-bond. [Cases: United States 91. C.J.S. United States §§ 164, 167.]
capital structure
capital structure. The mix of debt and equity by which a business finances its operations; the relative proportions of short-term debt, long-term debt, and capital stock.
sinking fund
A fund consisting of regular deposits that are accumulated with interest to pay off a long-term corporate or public debt. — Abbr. SF. [Cases: Corporations 486; Municipal Corporations 951. C.J.S. Corporations § 671; Municipal Corporations §§ 1704–1705.]