Net debt

What is net debt? What information does it provide about the liquid funds a company has available after the redemption of all liabilities?

What’s it all about?

  • What does net debt mean?
  • How is net debt calculated?

The net debt of a company provides information about the liquid funds that a company has available after the redemption of all liabilities with the current liquid funds.

As a key financial figure, net debt makes it possible to estimate a company’s financial situation. Investors and analysts use the key figure to assess a company’s financial stability and solvency. Low net debt indicates a financially robust situation.

Calculating net debt

Net debt is calculated from the difference between liabilities and liquid funds, including short-term financial investments.

The calculation formula is:
Net debt = liabilities - liquid funds

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