What is the 'Net Debt To EBITDA Ratio'
The net debt to EBITDA ratio is a measurement of leverage, calculated as a company's interestbearing liabilities minus cash or cash equivalents, divided by its EBITDA. The net debt to EBITDA ratio is a debt ratio that shows how many years it would take for a company to pay back its debt if net debt and EBITDA are held constant. If a company has more cash than debt, the ratio can be negative.
BREAKING DOWN 'Net Debt To EBITDA Ratio'
The net debt to EBITDA ratio is popular with analysts because it takes into account a company's ability to decrease its debt. Ratios higher than 4 or 5 typically set off alarm bells because this indicates that a company is less likely to be able to handle its debt burden, and thus is less likely to be able to take on the additional debt required to grow the business. Ultimately, however, it depends on the benchmark of the industry you are looking at.

EBITDA  Earnings Before Interest, ...
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EBITDA To Fixed Charges
A ratio used to measure a company's ability to incur additional ... 
Adjusted EBITDA
Adjusted EBITDA is a measure computed for a company that looks ... 
Debt Ratio
A financial ratio that measures the extent of a company’s or ... 
Net Debt
A metric that shows a company's overall debt situation by netting ... 
Capitalization Ratios
Indicators that measure the proportion of debt in a company’s ...

Fundamental Analysis
Calculating the Net Debt to EBITDA Ratio
Financial analysts typically use the net debt to EBITDA ratio to determine a company’s ability to pay its debt. 
Options & Futures
EBITDA: Challenging The Calculation
This measure has a bad rap, but it's still a valuable tool when used appropriately. 
Investing
Free Cash Flow vs EBITDA: Which Should You Analyze?
FCF and EBITDA are two ways of looking at the earnings of a business. EBITDA might be better for comparison purposes, while FCF is good for valuation. 
Investing
Debt Ratio
The debt ratio divides a company’s total debt by its total assets to tell us how highly leveraged a company is—in other words, how much of its assets are financed by debt. The debt component ... 
Fundamental Analysis
4 Leverage Ratios Used In Evaluating Energy Firms
These four leverage ratios can help investors understand how oil and gas firms are managing their debt. 
Economics
Explaining the EBITDA Margin
EBITDA margin can provide an investor with a cleaner view of a company's core profitability. 
Investing Basics
4 Leverage Ratios Used In Evaluating Energy Firms
Analysts use specific leverage ratios to compare firms within an industry. A basic understanding of these ratios helps when evaluating oil and gas stocks. 
Investing Basics
Understanding Leverage Ratios
Large amounts of debt can cause businesses to become less competitive and, in some cases, lead to default. To lower their risk, investors use a variety of leverage ratios  including the debt, ... 
Economics
Calculating the Debt/EBITDA Ratio
The debttoEBITDA ratio measures a company’s ability to pay off its debt. 
Investing
Total Debt to Total Assets
Total Debt to total assets, also called the debt ratio, is an accounting measurement that shows how much of a company’s assets are funded by borrowing. In business, borrowing is also called leverage.

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