A
Glossary
Net Debt / EBITDA
Essential — core valuation theory
What it measures
Years of cash profit to clear its debt. Under 1 very low, 2–3 moderate, over 4 risky. Negative = net cash.
Formula
(Total Debt − Cash) ÷ EBITDABenchmark
< 1.5x healthy · > 4x risky · Negative = net cash
Related metrics
Source
Moody's credit rating methodology