Net Debt Calculator

Written by CFI Team

Published April 17, 2018

Updated February 6, 2023

Net Debt Calculator

This net debt calculator helps you compute the net debt using the formula:

Net debt = Short-term debt + Long-term debt – Cash and equivalents

Below is a screenshot of the net debt calculator:

Net Debt Calculator

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Net debt is a financial liquidity metric that measures a company’s ability to pay all its debts if they were due today and whether the company is able to take on more debt. In other words, net debt compares a company’s total debt with its liquid assets.

Formula for Net Debt

Net debt = Short-term debt + Long-term debt – Cash and equivalents

where:

Short-term debts are financial obligations that are due within 12 months. Common examples of short-term debts include accounts payable, short-term bank loans, lease payments, wages, and income taxes payable.
Long-term debts are financial obligations that are due beyond a 12-month period. Common examples of long-term debts include bonds, lease obligations, contingent obligations, notes payable, and convertible bonds.
Cash and cash equivalents are the most liquid assets of a company. Common examples of cash and cash equivalents include marketable securities, commercial paper, treasury bills, and bank accounts.

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