DEFINITION of Short-Term Debt
Short-Term Debt is a kind of debt with a short maturity, usually one year or less. In a company's balance sheet short term debts are shown within the current liabilities section. Short-term debt accounts comprise any debt due within one year. The value of this account is very important when a corporation's financial health is analyzed. If the firms owes more short-term debt than available cash or cash equivalents, it can be forced to take on additional debt. This suggests that the firm may be in poor financial health. The short-term debt account also includes that portion of the long-term debts which are due within a year.