What is Net Leverage?
Net Leverage A measure of financial leverage calculated as total debt minus cash and cash equivalents, divided by EBITDA or another performance metric; reflects the company’s effective indebtedness after netting liquid assets.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Net Leverage” Used in Practice?
Net leverage is closely monitored by rating agencies and creditors, as it accounts for the impact of available cash on the company’s overall debt profile.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Net Leverage?
A measure of financial leverage calculated as total debt minus cash and cash equivalents, divided by EBITDA or another performance metric; reflects the company’s effective indebtedness after netting liquid assets.
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