Net Debt

What is Net Debt?

Net debt measures a company’s overall debt position after accounting for its cash and cash equivalents. It shows how much debt would remain if the company used its available cash to pay off its financial obligations. A lower or negative net debt often indicates strong financial health.

Formula:
Net debt = Total debt – (Cash + Cash equivalents + Short-term investments)

Note: If a company has more cash than debt, net debt can be negative.