Debt
Also called: borrowing, borrowings
Money a business has borrowed and must repay with interest, such as bank loans and bonds.
Debt is borrowed money. Lenders receive interest and the return of their money on agreed dates, whether or not the business is doing well. That fixed obligation makes debt risky for the borrower: missing payments can push a company into default.
In return, lenders do not share in the profits beyond their interest, and they are repaid before shareholders if the company fails.
Example
A company with a ₹200 crore loan at 9% interest must pay ₹18 crore of interest a year, even in a year when it makes a loss.
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