MARKETS / GLOSSARY / NET DEBT

Net debt

Net debt is what a company would still owe if it used every dollar of cash it holds to repay its borrowings today.

Definition

How it is computed here

Formula(short-term debt + long-term debt) − cash and equivalents
UnitCurrency amount
PeriodOne fiscal year, as reported
SourceExtracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from
Identifierdivida_liquida
The inputs

What goes into the formula

Short-term debtBorrowings due within a year, including the current portion of long-term debt.
Long-term debtBonds and loans due after a year. The bulk of most companies' borrowing, and the part whose maturity profile the balance sheet total does not show.
Cash and equivalentsMoney on hand plus what can be turned into money almost immediately. Subtracted in full — this site does not attempt to judge which part of it is trapped abroad or pledged, because the filing does not say.

A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.

Worked example

How to calculate net debt, step by step

Two companies with identical gross debt.

Both — gross debt$4,000M
Company A — cash$5,000M
Company B — cash$200M
Both — equity$2,000M
  1. A: net debt = 4,000 − 5,000 = −$1,000M.
  2. B: net debt = 4,000 − 200 = $3,800M.
  3. A: net debt to equity = −1,000 ÷ 2,000 = −0.50×.
  4. B: net debt to equity = 3,800 ÷ 2,000 = 1.90×.

Result: −$1,000M against $3,800M on identical borrowings

A negative figure is not an error. It means the company holds more cash than debt, and it is a position many of the largest technology companies have held for years.

The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.

Why it matters

What net debt is good for

Net debt is how lenders, acquirers and credit agencies actually measure leverage, because a borrower sitting on cash is not in the same position as one that is not. It is also the numerator of net debt to equity, the standard leverage ratio on this site.

The limit

What this number does not tell you

The subtraction assumes the cash is available, and some of it never is — held in a foreign subsidiary, pledged as collateral, or required as a regulatory buffer. It also assumes the debt could be repaid today, and most bonds cannot be repaid early without a penalty. And like gross debt it is a total with no schedule: net debt of zero is no comfort at all if the cash matures in five years and the debt matures in five months.

Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.

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In the data

Highest reported net debt

From the most recent fiscal year of each company. Only companies reporting in US dollars are ranked here — a figure in yen or won is not larger, it is in another currency.

On a real company

See it in a published filing

Their sectors

These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.

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