Net Debt Calculator

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All debt due within 12 months: current portion of long-term debt, revolving credit, commercial paper, and short-term bank loans.
Debt maturing beyond 12 months: bonds, term loans, finance leases, and other non-current borrowings.
Any remaining interest-bearing obligations not captured above, such as pension obligations or preferred stock treated as debt.
Physical cash, bank deposits, and instruments maturing within 90 days (money market funds, T-bills, commercial paper).
Marketable securities and other investments that could be liquidated within 12 months, such as treasury notes and investment-grade bonds.
Earnings before interest, taxes, depreciation, and amortization. Used to compute the net debt/EBITDA leverage ratio.
Earnings before interest and taxes. Used for the interest coverage ratio.
Total interest paid on debt over the year. Divide EBIT by this to get the interest coverage ratio.
Operating cash flow minus capital expenditures. Used to estimate how many years the company needs to retire its net debt.
Currency
Net DebtModerate Leverage
$150,000,000

Total interest-bearing debt minus all liquid assets

Gross Debt$250,000,000
Liquid Assets$100,000,000
Net Debt / EBITDA2x
Interest Coverage Ratio4.58x
Years to Repay (at FCF)3.8yr
Gross Debt$250,000,000
Liquid Assets$100,000,000
Net Debt$150,000,000
2 x
Conservative<1.5Moderate1.5-3Elevated3-5High / Distressed5+

This company carries moderate leverage.

  • Liquid assets cover 40.0% of gross debt, leaving a net debt of $150,000,000.
  • A net debt/EBITDA of 2.00x is within the range most lenders consider manageable (typically below 3x).
  • An interest coverage ratio of 4.58x suggests the business comfortably generates enough operating profit to service its debt.
  • At the current free cash flow rate, the company would retire its net debt in approximately 3.8 years.

Next stepCompare net debt/EBITDA to industry peers, since capital-intensive sectors like utilities and real estate routinely operate at 4-6x while technology firms often stay below 1x.

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