Leverage
What is Net Debt/EBITDA?
Net Debt/EBITDA measures how many years of operating earnings it would take to pay off a company's net debt, the most common leverage metric used by analysts.
Formula
Net Debt/EBITDA = (Total Debt - Cash) ÷ EBITDA
How to Interpret
Below 2x is comfortable. Above 4x is heavily leveraged. Used extensively in credit analysis and M&A.
Typical Ranges
Below 2x is conservative, 2-3x moderate, above 4x is high leverage.
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter US or Indian stocks by Net Debt/EBITDA.