Current Portion of Long Term Debt and Capital Leases

Current Port. of LT Debt/Capital Leases is Long Term Debt due within a year. The value of Current Port. of LT Debt/Capital Leases should be much less than Cash & Equivalents. To determine the company's financial health, add Current Port. of LT Debt/Capital Leases to Notes Payable/Short Term Debt and check if it is less than  Cash and Short Term Investments.

A company that has lots of cash and very little or no debt will easily survive a recession. If the company has a Durable Competitive Advantage, too much Long Term Debt due will scare investors and drive the company's stock price lower making it a potential take over. But, if the company does not have  a Durable Competitive Advantage, too much Long Term Debt that is due can drive that company into bankruptcy.

 

Equations

 

Check if Current Port. of LT Debt is much less than Cash & Equivalents:

Current Portion of Long Term Debt and Capital Leases

 

Check the company's financial health:

Current Portion of Long Term Debt and Capital Leases use it to check financial health

 

Check if the company will survive a recession:

 

If the company's financial health is not good, meaning the company has more debt due than cash, these are the potential outcomes:

Does the company have a Durable Competitive Advantage?

Potential Outcome

Yes Take Over Target
No Bankruptcy

 

My Financial Analysis of Stocks

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  • IBM's Fortunes Finally Turns Around Today Warren Buffett purchased IBM shares in the year 2012 worth billions of dollars. Yet the stock has pummeled and has been pounded downwards for the past 5 years. The company ...
    Posted Oct 20, 2017, 1:58 PM by Intelligent Investor
  • Exchanged AT&T (T) for Time Warner (TWX) and Dumped Hilton Worldwide (HLT) I exchanged AT&T (T) for Time Warner (TWX). Their merger currently gives TWX a 6% premium. AT&T is offering $107/share for TWX. Time Warner is currently priced ...
    Posted Sep 1, 2017, 4:36 PM by Intelligent Investor
  • My Stock Holdings 2017 View Analysis: My Stock Holdings 2017Hilton Worldwide Holdings (HLT) split into 3 companies. So we now own the following 3 Hilton companies:1) Hilton Worldwide Holdings (HLT)2) Hilton ...
    Posted Aug 28, 2017, 6:46 PM by Intelligent Investor
  • Repurchased Apple After Warren Buffett Confirms He Purchased it As a rule-of-thumb, if an investment has a Return on Equity (ROE) of greater than 30%, it means the company has a Durable Competitive Advantage. Apple's Return ...
    Posted Jun 5, 2017, 12:35 PM by Intelligent Investor
  • Purchased Hilton Hotels in Anticipation of a 3 for 1 Stock Spin-Off Last December I purchased Hilton Hotels in anticipation of a 3 for 1 stock spin-off. In other words, Hilton Hotels will be splitting into 3 independent companies. The most ...
    Posted Mar 1, 2017, 6:12 PM by Intelligent Investor
  • Warren Buffett's 5 Best Investing Tips 1) Don't buy or sell based on the headlines.2) Don't try to profit from bubbles.3) Put your emotions aside.4) Always invest in productive assets.5 ...
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