Accounting method
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Current liabilities and long-term liabilities (caption of account) have the same accounting method.
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Relevant financial indicators
Contents
Team Introduction Long-term liabilities Bond issuance long-term notes payable Case Analysis
Long term liabilities’ definition and connotation
Definition and Connotation：Long-term
Bond issuance
Issuing mode of Bond
According to the similarities and differences between the actualissue price and coupon bond price, the issuance of bonds can beissued at par （平价）, premium （溢价）and discount.（折价） 5 At par,it means the bond price equal to par value Issued at a premium, it means that the bond price is higher than the par value Issued at a discount , it means that the bond price is lower than the par value
(total liabilities and accounts receivable) / total assets 100%
(total longterm debt / assets)* 100%
(current assets / liabilities inventory)
Cash / current liabilities
computational formula
Ratio of fixed assets to long-term liabilities = Fixed assets / liabilities * 100%
This ratio can indicate how much the company fixed assets are available for long-term borrowing collateral as well as the long-term creditors’ rights security degree. As an ordinary company, fixed assets, especially as collateral, should be maintained in a certain ratio with long-term debt, as a debt security. Generally, this ratio is at least more than 100%, the greater the more can guarantee the long-term interests of creditors.
Bond issuance
Bond issuance conditions
Bond issuance conditions refer to the relevant factors of bond issuers must consider the bond financing, including the issuance, par value(面值), time limit,（期限） repayment method（偿还方式）, interest rate（利率）, payment of interest, issue price（发行价格）, issue expenses（发行费用） and so on. Bond issuance 5 conditions determine the profitability（收益性）, liquidity （流动性） and security（安全性） of bonds issuer, directly affect the financing cos（筹资成本）t and the amount of investment profit（投资收益）. For investors, the most importantissue is the bond's coupon rate（票面利率）, the maturity date（偿还期限） and issue price（发行价格） because they determine the bond investment value, so it is called the three basic conditions of bond issuance
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Characteristics of long-term liabilities
Thirdly Secondly Firstly
maintaining a good capital structure can enhance the solvency of enterprises The long-term solvency of the enterprise and enterprise's profit ability is closely related to each other
Long-term Debt Ratio
Analysis of the main points
1
Compared with the current liabilities, long-term liabilities are relatively stable。
2
Compared with the owner's equity, long-term liabilities have fixed terms of repayment, fixed interest payments and capital source.And its stability cannot compare with the owner's equity.
The short-term debt paying ability is the foundation of long-term solvency
Types of long-term liabilities
1 long-term loan 2
bonds payable
3 long-term payables
Date Name
Long-term Debt Ratio
The quick ratio
Cash flow and debt ratio
Asset liability ratio (%)
The liquidity ratio
Net accounts receivable after the debt ratio
Total debt / total assets
100%
Assets / liabilities
Important ratio analysis
5
Long-term Debt Ratio
Definition ：Long term debt ratio， as is also called "the capital ratio", is an indicator of corporate debt in general. It is the ratio of long-term 5 debt to total assets. Total assets equal liabilities and shareholders’ equity.
Bond issuance
The accounting of bond issuance
Example1
Assume that a company on January 1st 2012 issue a three year bond 100 pieces, each with a face value of 1000 yuan,10% of the nominal interest rate, every June 30th and December 31st all interest bearing time, of a debt due. If The issue of corporate bonds at par. 5 The issuance of bonds shall be recorded by the following entry:
Long-term Debt Ratio
● Formula as follows
Long term liabilities ratio = (total long-term debt / assets)* 100% Explanation：If the index reveals small, the degree of debt capitalization can be low, as well as the pressure from long-term debt paying; On the contrary, it reveals that high5capitalization company debt and long-term debt paying pressure. The indicator is mainly used to reflect the proportion of long-term debt with interest in the long-term working capital. So, the ratio should not be too high, the general should be below 20%.