Net Financial Debt (NFD)

What is Net Financial Debt?

Net Financial Debt is a company’s non-operational debt that considers cash and short-term securities against financial debt.
Alternate names: Net Debt

How to calculate Net Financial Debt

ƒ Sum(Long Term Debt + Current Portion Debt + Dividends Payable + Notes Payable - Cash) + (Short Term Investments)

Favourable trend

Less is better

Complexity level:
Intermediate

Date created: Feb 20, 2019

Latest update: May 15, 2019

Tell me more about this metric

Net Financial Debt allows the company to count its cash and short-term securities as credit towards their financial debt. This allows the company to see a clearer picture of their actual financial debt.

Ken Faulkenberry has written a good article on Net Financial Debt and why it's an important liquidity and leverage metric to understand.

 

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