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Finance
Net Debt
Total debt minus cash and cash equivalents — a quick way to see how much a company really owes after using its cash.
Net debt is more useful than gross debt for comparing companies. Analysts use it in valuation multiples (EV/EBITDA) because it shows the true debt burden after cash is used to pay some of it off.
It's like checking how much you still owe on your credit card after emptying your wallet.
Real world: Apple has huge cash reserves. Even if it has £100 billion in debt, its net debt might be negative because cash is higher. This makes the company look financially very strong.
💡 Net debt shows the real money a company owes after using what it already has in the bank.