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How to read financial statements and spot cash flow problems or financial risks hidden behind strong profits.

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From Financial Statement Analysis: Reclassifying financial statements · Reclassifying the Balance Sheet

A five-year bank loan requires one installment next year. How is it shown after reclassification?

  1. All of it stays non-current until the last year
  2. All of it is current because it is bank debt
  3. Next year's installment becomes a current liability
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Answer: Next year's installment becomes a current liability

The portion due within twelve months is moved to current liabilities, because that cash must be found in the coming year; the rest stays long-term.

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