Net debt

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Credit risk - liquidity - loan documentation.

An organisation's net debt is generally defined as its total debt LESS its cash and cash equivalents.

However, definitions may vary in their detail, in different contexts.

Financial covenants, and complying with them, is one very important context.

Here as elsewhere, it is important to spell out assumptions and definitions explicitly, and to reconcile net debt figures reported to other reported figures.

See also