Total debt

Total debt is the sum of a company's short-term debt and long-term debt, every interest-bearing obligation on the balance sheet regardless of when it comes due.

The formula is:

It differs from total liabilities, which is broader and includes non-debt obligations like accounts payable, deferred revenue, and deferred tax liabilities that don't carry interest. Total debt isolates specifically the financing side of the balance sheet, the borrowings a company chose to take on to fund itself, rather than every claim against it.

Total debt is also distinct from net debt, which subtracts cash and equivalents to show the debt burden that isn't already offset by cash on hand. Total debt ignores cash entirely and simply adds up the gross borrowings.

It is a common input in several ratios and valuation measures: enterprise value adds total debt to market cap, since a buyer would take on that debt, the debt-to-equity ratio divides total debt by total shareholders equity to measure leverage, and return on invested capital uses total debt plus shareholders equity as the denominator representing all the capital a company has to work with.