Debt issuance
What it measures¶
Net debt issuance is the new debt a company took on minus the debt it repaid. This check adds it up over the latest three fiscal years and asks: did the company avoid adding to its debt, net, over that time? It reads the borrowing and repayment lines of the cash-flow statement where they are stored, and otherwise the change in total debt between the two balance sheets three years apart. The figure is in millions of the reporting currency.
Why it is on the page¶
Companies that keep borrowing more are, on average, those whose own cash does not cover what they pay out or invest. The "Quality minus junk" study by Asness, Frazzini and Pedersen counted net debt issuance among the marks of a lower-quality company across many countries and decades. Three years smooth out a single year's refinancing.
Thresholds, their source and the population they were fitted on¶
| Result | When |
|---|---|
| ✓ passed | net debt issued over three years is 0 or less (the company repaid at least what it borrowed) |
| ✕ failed | it is above 0 |
| ○ not evaluable | neither the borrowing lines nor the total debt three years apart are stored |
- Source: Asness, Frazzini and Pedersen, "Quality minus junk" (the payout component).
- Fitted on: listed companies in 24 countries, 1951–2012.
- Evidence grade: peer-reviewed and replicated.
- Basis: own history — the company's own three years.
A worked example¶
Honeywell International (statements stored on 25 October 2026): total debt was 9,117 million US dollars higher at the end of fiscal 2025 than at the end of fiscal 2022 — failed.
Apple, over the same three years, repaid 22,332 million US dollars more than it borrowed — passed.
What “No verdict” means here¶
The check is not evaluable when neither the debt lines of the cash-flow statement nor the total debt of both ends of the three-year window are stored; the missing input is named and the check leaves the area's count.
What the verdict is and is not¶
A pass says the company did not add to its debt over three years. A failure is not a finding that the borrowing was unwise — debt raised to acquire a profitable business or to build capacity counts the same way here. It is not a forecast and not an instruction to trade the shares.