Financial Statements Flashcards
Understand all the line items on a financial statement and how they are calculated.
1
Q
What is Net Debt?
A
Net Debt = Gross Debt – Cash and Equivalents
Gross Debt = long term debt + short term debt
Net Debt is a liquidity measure that determines how much debt a company has on its balance sheet relative to its cash on hand.
Conceptually, net debt is the amount of debt remaining once a company hypothetically paid down as much debt as possible using its highly-liquid assets, namely cash.
2
Q
A
