Total Debt Issued
Total Debt Issued refers to the total amount of funds raised by a company during a specific accounting period through the issuance of debt instruments (such as bonds, loans, etc.). This item reflects the total amount of new debt financing obtained by the company during that period to support its operations, investments, or other financial needs.
Definition: Debt financing refers to a company raising funds by issuing debt instruments such as bonds and loans. The total amount of debt issuance in the cash flow statement reflects the total amount of new debt financing the company has raised during the period to support its operations, investments, or other financial needs.
Origin: The concept of debt financing dates back to ancient times when merchants and governments borrowed funds to finance trade and wars. The modern concept of corporate debt financing began in the 19th century during the Industrial Revolution, as capital markets developed and companies started issuing bonds and loans to raise large-scale funds.
Categories and Characteristics: Debt financing can be divided into two main categories: short-term debt and long-term debt. Short-term debt typically matures within a year and is used for temporary funding needs, such as working capital. Long-term debt has a longer maturity and is usually used for capital expenditures and long-term investments. Short-term debt generally has lower interest rates but requires frequent refinancing, while long-term debt has higher interest rates but provides more stable funding.
Specific Cases: Case 1: A technology company decided to issue five-year bonds to raise 100 million yuan for new product development. With this funding, the company successfully developed and launched the new product, which received a positive market response and significantly increased sales. Case 2: A retail company raised 50 million yuan in short-term funds through a bank loan before the peak season to increase inventory. After the peak season, the company repaid the loan with sales revenue, ensuring the stability of its cash flow.
Common Questions: Investors often have questions such as: 1. How to assess a company's debt repayment ability? 2. What are the advantages and disadvantages of debt financing compared to equity financing? Common misconceptions include thinking that more debt is always better, ignoring the financial risks of excessive borrowing.
