Net Debt

Refers to the total debt of a company minus its cash and cash equivalents. Often used to determine a company’s ability to meet its debt obligations and its overall leverage after accounting for the fact that it has cash on hand that could be immediately used to fulfill those obligations.

Example

• Total Debt: $500,000
• Cash and Cash Equivalents: $200,000
• Net Debt: $500,000 - $200,000 = $300,000