Net Financial Debt (NFD)

Date created: Feb 20, 2019  •   Last updated: Sep 27, 2019

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

Formula

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

Net Financial Debt

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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.