2 min read
Definition
Net debt is total interest-bearing borrowings less cash and cash equivalents. It strips out the cash a company could use immediately to repay debt, giving a truer picture than gross debt.
In plain terms
A business sitting on plenty of cash is less indebted than its loan balance suggests. Net debt shows the position after that cash is netted off.
Why it matters for your company
Lenders judge leverage on net debt — via net debt/EBITDA and gearing. Keeping net debt in check widens your options and lowers your rate. Check leverage with the gearing ratio calculator.
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Gearing
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Enterprise value
Enterprise value (EV) is the whole-business price — equity plus net debt — the figure a buyer would really…
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.