Cash from Short-Term Debt

Category

Cash Flow

Units

Currency

US-GAAP elements

ProceedsFromShortTermDebtProceedsFromRepaymentsOfShortTermDebtProceedsFromRepaymentsOfCommercialPaper

Reference

ASC 230, Statement of Cash Flows (financing activities)

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

Cash from short-term debt is the cash a company received during a period from borrowings that, when taken on, were due within one year or within the operating cycle if that is longer. Common sources include commercial paper, bank overdrafts, short-term bank loans, and draws on short-term credit lines. It appears in the financing section of the cash flow statement.

Many companies report this line net of repayments, so it can represent either the gross amount borrowed or the net change in short-term borrowings.

ASC 230 generally requires borrowings and repayments to be shown gross, but it permits net reporting for items with quick turnover, large amounts, and short maturities, including debt with a maturity of three months or less. Commercial paper programs, where notes are issued and repaid continually, are the classic case. In XBRL, a company reporting gross borrowings uses ProceedsFromShortTermDebt; one reporting a net figure uses ProceedsFromRepaymentsOfShortTermDebt, which can be positive or negative; and commercial paper is often tagged ProceedsFromRepaymentsOfCommercialPaper. Knowing which is being used matters, because a gross figure can be many times larger than the net one.

Short-term debt in this sense is defined by original maturity. The current portion of long-term debt, meaning long-term borrowings that will mature within the next year, is not short-term debt for cash flow purposes; its repayment is reported as repayment of long-term debt.

Companies lean on short-term borrowing to cover seasonal working capital needs, such as a retailer building inventory before the holidays, or to bridge the gap before a longer-term financing. Heavy reliance on short-term debt carries rollover risk: if credit markets tighten, the company must repay or refinance on less favorable terms. Analysts watch the balance of short-term borrowings against cash and committed credit lines to judge that risk.