Net debt to EBITDA

Debt and balance sheet

How many years of operating earnings (before depreciation) the net debt equals.

How it is worked out

Net debt divided by earnings before interest, taxes, depreciation and amortisation (EBITDA) over the last twelve months.

How to read it

  • Lower means less borrowing against what the company earns. Negative means net cash.
  • Companies with steady revenue (utilities, property) usually carry more debt than cyclical ones.

Example

Net debt $2bn, EBITDA $1bn: 2 times.

Related terms

Related pages

The other pages on US stocks, free to read. On the company pages, the last three fiscal years are open to everyone, five with a free account, and every year with Ploutos Investor.

US stocksThe market today, the sectors, the largest companies and the week's results.The market's sectorsThe 11 sectors side by side: returns, share of the market, median P/E and dividend.Compare stocksTwo companies side by side: price over up to ten years, with and without dividends, and every figure.US dividend stocksEach dividend's yield next to whether the company's cash covers it and whether it was ever cut.

Explanations of terms for learning, with examples from SEC filings.