What is net debt repayment?

A measure of a company’s ability to repay all its debts simultaneously. It’s often used as an indicator of a company’s financial health.

Where have you heard about net debt repayment?

Investors will often look at a company’s net debt when making decisions on whether to invest in the business. You may also hear figures reported in the financial news.

What you need to know about net debt repayment.

Net debt is calculated by subtracting a company’s cash and cash equivalents from its total debt. Cash equivalents are highly liquid assets such as savings accounts, marketable securities and money market accounts.

High levels of net debt are often seen as a sign of poor financial health, but they can be just one part of a bigger picture. For example, a company may have taken on debt to fund an expansion project. By looking at a company’s financial history, the balance of their short and long-term debts and comparing this to similar companies in their industry, you can get a better idea of whether they’ll be a good investment.

Find out more about net debt repayment.

Net debt is a metric that’s often used in technical analysis. Find out more in our definition.