debt
noun
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Definition of debt
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Other Words from debt
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adjective
Synonyms for debt
Synonyms
arrearage, arrears, indebtedness, liability (usually liabilities), obligation, score
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Examples of debt in a Sentence
Recent Examples on the Web
But this time officials have been much more restrained in their response, partly because of concern about adding to China’s hefty debt burden. — The Economist, "China is calm as growth slows. But is it complacent?," 31 Aug. 2019 Most of these men and their families has worked for years ‘on shares’ and had come out every year in debt or just barely out. — Lateshia Beachum, Washington Post, "A massacre of blacks haunted this Arkansas city. Then a memorial tree was cut down.," 30 Aug. 2019 As with the 50/30/20 rule, money for wants are used to repay debts. — Kara Stevens, Essence, "4 Money Moves to Make Before Your #HotGirlSummer Comes To A Close," 29 Aug. 2019 Citing people close to the plans, Bloomberg said the company has been in talks for additional financing and working to restructure debt but no solution has yet been found. — Leada Gore | [email protected], al, "Forever 21 reportedly preparing to file bankruptcy," 29 Aug. 2019 Topics include debt management, retirement planning, and college planning. — Max Jungreis, BostonGlobe.com, "Weekend agenda," 29 Aug. 2019 For example, airlines United, Delta and American all filed for Chapter 11 protection in the mid-2000s and managed to unload enough debt to stay aloft. — Lindsey Simon, The Conversation, "Why companies file for bankruptcy – and how it protects both debtors and creditors," 29 Aug. 2019 Spammy text messages promising free gift cards, low credit card interest rates, debt relief services or other scams are the next nuisance taking over our phones. — Kim Komando, USA TODAY, "6 clever ways to quash robotext spam messages before it’s too late," 29 Aug. 2019 Libra is similar to stable coins but would be backed by several different currencies and debt instruments rather than by only the U.S. dollar. — Joe Lightbloomberg, Los Angeles Times, "Cryptocurrency lobby fights to contain backlash from Facebook’s Libra," 28 Aug. 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'debt.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for debt
debt
nounFinancial Definition of debt
What It Is
In the business world, debt is an amount borrowed.
How It Works
For example, let's assume Company XYZ has invented a new product that will revolutionize the widget market. The company is certain there will be demand from billions of people around the world, and therefore it needs to build a new factory. If Company XYZ's funds for constructing the factory were limited to its cash on hand, say $200,000, it certainly could not build the kind of factory it needs to capitalize on this tremendous opportunity and would thus be very limited in its output and profits (and would leave the market wide open for competitors to fill the void). With some debt, however, Company XYZ could build the factory and take advantage of the profit potential of its product. The debt essentially magnifies the profits.
Debt comes in several forms, but in the business world, bank loans and corporate or government bonds are the most common.
Why It Matters
Debt is a liability, meaning that the lender has a claim on a company’s assets. Debt due within one year is generally classified as short-term debt on a company’s balance sheet. Debt due in more than one year is considered long-term debt. It is important to note here that debt commonly comes to mind when one considers liabilities, but not all liabilities are debt. Companies may incur several other types of liabilities, including (but not limited to) upcoming payroll, bonuses, legal settlements, payments to vendors, certain derivatives, contracts, certain types of leases, and required stock redemptions. Common balance sheet categories for liabilities include accounts payable, accrued expenses and debt.
Information about a company’s debt is a key component of accurate financial reporting and a crucial part of thorough financial analysis. Excessive debt can ruin a company but is not always detrimental. The use of debt financing can magnify profits that would have otherwise gone unrealized.
Source: Investing Answers
debt
noun
English Language Learners Definition of debt
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debt
noun