Current Portion of Long Term Debt (CPLTD)
What does it mean
Current Portion of Long Term Debt (CPLTD) represents the portion of a long term loans principal balance that will be paid during the coming 12 months if the minimum required payments are made. The liabilities of a balance sheet are broken into Current Liabilities and Noncurrent Liabilities. Current Liabilities are the debts that will be paid during the coming 12 months, and Noncurrent Liabilites are debts that will be paid in longer than 12 months. One unique type of liability though would be installment loans that may be paid in 3, 5 or 20 years. The majority of the loan will not be repaid in the next 12 months, but a small portion of the principal will as the borrower makes monthly P&I payments. That portion that will be paid in the next 12 months is referred to as CPLTD, and that portion is deducted from Noncurrent Liabilties and added to Current Liabilities.
Why does it matter
CPLTD matters because much of a bank’s analysis is based on the cash flow of the business, and combining the CPLTD from the balance sheet with the interest expense from the income statement is one option for how to determine the loan payment requirements that a business may have.
Other Relevant Terms
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