Page Updated on September 20, 2026
Overview
Net Debt / EBITDA measures a company’s debt relative to the earnings generated by its operations.
The metric compares Net Debt with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). It provides a way to evaluate a company’s financial leverage while accounting for the cash it holds and the earnings generated by the business.
A lower Net Debt / EBITDA ratio generally indicates that a company has less debt relative to its operating earnings. A value of zero or less indicates that the company has enough cash to offset all of the debt included in the calculation.
Formula
StockZuse calculates Net Debt / EBITDA as:
Net Debt is calculated as:
For StockZuse, Total Debt consists of:
Short-Term Debt is included when it is separately available in the company’s financial data.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. StockZuse calculates EBITDA as:
For example, if a company has $25.44 billion in Net Debt and $22.91 billion in EBITDA, StockZuse calculates:
The resulting Net Debt / EBITDA ratio is approximately 1.11x.
How StockZuse Uses the Metric
StockZuse uses Net Debt / EBITDA as a Business Quality metric within the ZuseScore.
The metric evaluates financial leverage by comparing debt remaining after cash is deducted with the company’s EBITDA. This provides additional context about a company’s debt burden relative to the earnings generated by its operations.
Within the ZuseScore methodology, lower Net Debt / EBITDA ratios receive more points. A ratio of 0.00x or less represents a net-cash position under this calculation and receives the maximum points for this metric.
ZuseScore Point System
Net Debt / EBITDA contributes a maximum of 12 points to the ZuseScore.
| Net Debt / EBITDA | Points |
|---|---|
| 0.00x or less | 12 / 12 |
| Above 0.00x through 0.50x | 11 / 12 |
| Above 0.50x through 1.00x | 9 / 12 |
| Above 1.00x through 1.50x | 8 / 12 |
| Above 1.50x through 2.00x | 6 / 12 |
| Above 2.00x through 2.50x | 4 / 12 |
| Above 2.50x through 3.00x | 3 / 12 |
| Above 3.00x through 4.00x | 1 / 12 |
| Above 4.00x | 0 / 12 |
If the financial data required to calculate the metric are unavailable, Net Debt / EBITDA is not scored. Consistent with the ZuseScore methodology, unavailable metrics reduce the possible-point denominator rather than receiving zero points.
Interpretation
Net Debt / EBITDA provides a standardized way to compare financial leverage among companies.
A lower ratio indicates less net debt relative to EBITDA. A negative ratio indicates that the cash included in the calculation exceeds Total Debt. Higher positive ratios indicate progressively more net debt relative to EBITDA.
The metric should not be considered by itself. Companies and industries can have substantially different capital structures, financing requirements, and typical leverage levels. StockZuse therefore uses Net Debt / EBITDA as one component of the broader ZuseScore rather than as a standalone investment conclusion.
Data Used
StockZuse calculates Net Debt / EBITDA using annual financial data that may include:
Operating Income, Depreciation & Amortization, Cash, Current Debt, Non-Current Debt, and, when separately reported, Short-Term Debt.
The financial values used for a particular analysis can be reviewed from the Net Debt / EBITDA Metric Score Detail window in StockZuse.
Related Methodology
For information about how this metric combines with the other ZuseScore metrics, see ZuseScore Methodology.