Current portion of long-term debt is a financial term that refers to the portion of long-term debt that is due within one year. It is reported on a company’s balance sheet as a current liability. Long-term debt is debt that is due in more than one year. Companies issue long-term debt to finance major projects, such as the purchase of new equipment or the construction of a new facility.
The current portion of long-term debt is important because it indicates how much of a company’s debt is coming due in the near term. This information is important for investors and creditors because it can help them assess a company’s ability to meet its financial obligations. If a company has a large current portion of long-term debt, it may be at risk of default if it does not have sufficient cash flow to cover its debt payments.