Short Term Debt Payments
Cash Outflows for Repaying Debt Due Within One Year
Short Term Debt Payments represent the actual cash paid during the period to reduce or repay short-term borrowings—obligations originally due within 12 months, such as commercial paper, lines of credit draws, current maturities of long-term debt, or other short-term notes. These outflows appear in the financing section of the cash flow statement and reflect the company's management of near-term debt obligations.
What It Covers
Short Term Debt Payments are cash used to pay down principal on borrowings classified as short-term.
- Repayment of commercial paper
- Paydown of revolving credit facility or line of credit
- Current maturities of long-term debt (portion due this year)
- Repayment of short-term notes or bank loans
- Settlement of other current borrowings
Interest payments are usually separate (Interest Paid).
Principal only—interest typically in operating or financing depending on policy.
A Simple Example
Company has a $200M revolving credit facility.
- Starts year with $150M drawn
- Borrows additional $50M during year
- Repays $100M by year-end
- Short Term Debt Payments: -$100M (outflow)
Net Short Term Debt Issuance = +$50M issuance − $100M payments = -$50M.
Common Reasons for Payments
- Reduce leverage or interest cost
- Free up borrowing capacity
- Meet debt covenants
- Seasonal cash surplus repayment
- Refinancing with longer-term debt
- Maturity of short-term instruments
Accounting and Presentation
- Cash outflow in financing activities
- Labeled 'Short Term Debt Payments' or 'Repayments of Short-Term Borrowings'
- Principal only (interest separate)
- Netted with issuances for 'Net Short Term Debt Issuance' in some presentations
Current portion of long-term debt repayment often included here.
Impact on Balance Sheet
- Reduces Current Debt or Short-Term Borrowings liability
- Improves current ratio and working capital
- Lowers interest expense going forward
- May signal stronger liquidity
What to Watch For
- Size relative to operating cash (sustainable?)
- Trend (consistent paydown = deleveraging)
- Net with issuance (rolling over or reducing debt?)
- Comparison to long-term debt payments
- Liquidity source (from operations or new borrowing?)
Large payments without offsetting issuance can strain short-term cash.
Key Takeaways
Short Term Debt Payments are cash used to repay short-term principal.
Financing outflow—reduces current debt obligations.
Includes revolver paydowns, commercial paper retirement, current maturities.
Often netted with new short-term issuance.
Positive sign: deleveraging or strong cash generation.
Monitor net change for true short-term funding strategy.
Short Term Debt Payments
Cash Outflows for Repaying Debt Due Within One Year
Short Term Debt Payments represent the actual cash paid during the period to reduce or repay short-term borrowings—obligations originally due within 12 months, such as commercial paper, lines of credit draws, current maturities of long-term debt, or other short-term notes. These outflows appear in the financing section of the cash flow statement and reflect the company's management of near-term debt obligations.
Table of Contents
What It Covers
Short Term Debt Payments are cash used to pay down principal on borrowings classified as short-term.
- Repayment of commercial paper
- Paydown of revolving credit facility or line of credit
- Current maturities of long-term debt (portion due this year)
- Repayment of short-term notes or bank loans
- Settlement of other current borrowings
Interest payments are usually separate (Interest Paid).
Principal only—interest typically in operating or financing depending on policy.
A Simple Example
Company has a $200M revolving credit facility.
- Starts year with $150M drawn
- Borrows additional $50M during year
- Repays $100M by year-end
- Short Term Debt Payments: -$100M (outflow)
Net Short Term Debt Issuance = +$50M issuance − $100M payments = -$50M.
Common Reasons for Payments
- Reduce leverage or interest cost
- Free up borrowing capacity
- Meet debt covenants
- Seasonal cash surplus repayment
- Refinancing with longer-term debt
- Maturity of short-term instruments
Accounting and Presentation
- Cash outflow in financing activities
- Labeled 'Short Term Debt Payments' or 'Repayments of Short-Term Borrowings'
- Principal only (interest separate)
- Netted with issuances for 'Net Short Term Debt Issuance' in some presentations
Current portion of long-term debt repayment often included here.
Impact on Balance Sheet
- Reduces Current Debt or Short-Term Borrowings liability
- Improves current ratio and working capital
- Lowers interest expense going forward
- May signal stronger liquidity
What to Watch For
- Size relative to operating cash (sustainable?)
- Trend (consistent paydown = deleveraging)
- Net with issuance (rolling over or reducing debt?)
- Comparison to long-term debt payments
- Liquidity source (from operations or new borrowing?)
Large payments without offsetting issuance can strain short-term cash.
Key Takeaways
Short Term Debt Payments are cash used to repay short-term principal.
Financing outflow—reduces current debt obligations.
Includes revolver paydowns, commercial paper retirement, current maturities.
Often netted with new short-term issuance.
Positive sign: deleveraging or strong cash generation.
Monitor net change for true short-term funding strategy.
Related Terms
Apply This Knowledge
Ready to put Short Term Debt Payments into practice? Use our tools to analyze your portfolio and explore market opportunities.
This content is also available on our main website for public access.