Debt Security

A security representing a loan given by an investor to an issuer. In return for the loan, the issuer promises to pay interest and to repay the debt on a specified date.

Government Security

A government debt obligation (local or national) backed by the credit and taxing power of a country with very little risk of default.

Long-Term Debt

Loans and financial obligations lasting over one year.

For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. Other securities such as T-bills and commercial papers would not be long-term debt as their maturities are typically shorter than one year.

In the U.K., long-term debts are known as "long-term loans."

Net Debt

Calculated as short- and long-term interest-bearing debt minus cash (and equivalents). Because cash is applied against debt, this metric gives an overall impression of a company's debt situation

Non-Recourse Debt

A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults.

Balance Sheet

A company's financial statement that reports the assets, liabilities and net worth at a specific time.

Current Liabilities

Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year.

Depreciation

1. An expense recorded to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases free cash flow while decreasing reported earnings.
2. A decrease in the value of a particular currency relative to other currencies.
Notes:
1. Depreciation is used in accounting to try and match the expense of an asset to the income that the asset helps the company earn. For example, if a company bought a piece of equipment for $1 million and expected it would have a useful life of 10 years, it would be depreciated over the 10 years. Every accounting year the company would expense $100,000 (assuming straight line depreciation), and this would be matched with the money that the equipment helps to make each year.