Net debt shows how much debt would remain if the company used all its cash to repay it. A net debt/EBITDA ratio above 3–4 is often considered high; negative net debt means a net cash position.
How to use the Net Debt Calculator
- Short-term debt
- Long-term debt
- Cash and cash equivalents
- EBITDA
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter short-term debt, long-term debt, cash and cash equivalents, and EBITDA.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Short-term debt | Amount in your currency |
| Long-term debt | Amount in your currency |
| Cash and cash equivalents | Amount in your currency |
| EBITDA | Amount in your currency |
What each result means
- Net debt = [Short-term debt] + [Long-term debt] – [Cash and cash equivalents]
- Net debt to EBITDA = [Net debt]÷[EBITDA]
Example values
How the main result changes when Short-term debt changes and everything else stays at the example values above:
| Short-term debt | Net debt |
|---|---|
| 100,000 | 1,200,000 |
| 150,000 | 1,250,000 |
| 200,000 | 1,300,000 |
| 250,000 | 1,350,000 |
| 300,000 | 1,400,000 |
| 400,000 | 1,500,000 |
Formula
Net debt = short-term debt + long-term debt − cash and cash equivalentsNet debt to EBITDA = net debt ÷ EBITDAWorked example
Inputs — Short-term debt: $200,000; Long-term debt: $1,500,000; Cash and cash equivalents: $400,000; EBITDA: $600,000.
Results — Net debt = $1,300,000.00; Net debt to EBITDA = 2.17.
Frequently asked questions
What is net debt?
Total debt minus cash and cash equivalents.
What is a good net debt to EBITDA ratio?
Below about 3 for most industries.
What does negative net debt mean?
The company has more cash than debt.
What formula does the Net Debt Calculator use?
Net debt = short-term debt + long-term debt − cash and cash equivalents.