Net Debt Calculator

Net Debt Calculator

This net debt calculator helps you compute the net debt using the formula:

Net debt = Short-term debt + Long-term debt – Cash and equivalents

Below is a screenshot of the net debt calculator:

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Net debt is a financial liquidity metric that measures a company’s ability to pay all its debts if they were due today and whether the company is able to take on more debt. In other words, net debt compares a company’s total debt with its liquid assets.

Formula for Net Debt

Net debt = Short-term debt + Long-term debt – Cash and equivalents

where:

• Short-term debts are financial obligations that are due within 12 months. Common examples of short-term debts include accounts payable, short-term bank loans, lease payments, wages, and income taxes payable.
• Long-term debts are financial obligations that are due beyond a 12-month period. Common examples of long-term debts include bonds, lease obligations, contingent obligations, notes payable, and convertible bonds.
• Cash and cash equivalents are the most liquid assets of a company. Common examples of cash and cash equivalents include marketable securities, commercial paper, treasury bills, and bank accounts.

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