Angie · learn
Net debt
Positive means a net borrower, negative means net cash. Subtracted from enterprise value to reach what shareholders own.
How it is calculated
Net debt = total debt − cash
A fuller explanation of this one is still being written. The definition above is the short answer.
See also
- Enterprise value — The value of the whole operating business, before asking who has a claim on it. Debt holders are paid before shareholders, so this is not yet what the shares are worth.
- Equity value — What is left for shareholders once the lenders have been paid.
- Total debt — Short-term plus long-term borrowings, before any cash is netted off.
- Net-debt override — Sets net debt by hand. Mostly used to supply industrial-only debt for a manufacturer whose in-house lending arm inflates the reported figure.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
