Net debt
Also called: net borrowings, net cash
A company's borrowings minus its cash and cash equivalents. A negative figure means it holds more cash than debt.
Net debt shows how much debt would remain if the company used all its cash to repay lenders. It is a better measure of indebtedness than total borrowings for companies that hold large cash balances.
Some analysts also include lease liabilities, so check how a quoted figure was calculated.
Example
Borrowings of ₹300 crore and cash of ₹120 crore give net debt of ₹180 crore.
Learn more in these lessons
- The balance sheetHow do you read a company's balance sheet?
- Debt-to-equity and net debtHow do you judge whether a company has too much debt?
- Enterprise valueWhat is enterprise value, and why is it different from market capitalisation?
- Real estate and infrastructure companiesHow do you analyse real estate developers and infrastructure companies?
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