Net debt
Total debt less cash and cash equivalents.
Formula
\text{Net debt} = \text{Total debt} - \text{Cash and equivalents}Cash and short-term deposits are subtracted from total debt. A negative result means a net cash position.
How to read the number
It is net debt that gets divided by EBITDA to judge how many years the business would need to repay what it owes.
When the metric lies
Cash on the balance sheet is not always reachable: it may sit in a subsidiary in a country with currency controls and never reach the creditor.
Where it is used
The metric is calculated across every security in the catalogue and appears on the instrument card, in the multiples table and in the screener.
Also known as: net debt