Net Debt-to-EBITDA Ratio

Net Debt-to-EBITDA Ratio

The net-debt-to-EBITDA ratio, a net debt leverage ratio, measures a company’s net debt (cf.) relative to its gross earnings. That is, its EBITDA (cf.) – earnings before interest, tax, depreciation and amortisation – a number that is considered a proper reflection of operating performance. Companies and analysts use the ratio to gauge how much borrowing capacity a company has.

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