Net debt to EBITDA
What it measures¶
Net debt is total debt minus cash: what the company would still owe if it used all its cash to repay lenders. EBITDA is earnings before interest, taxes, depreciation and amortisation — operating profit with the yearly write-down of equipment and acquired assets added back. Their ratio reads as a number of years: net debt of 2 times EBITDA would take about two years of that operating profit to repay.
Why it is on the page¶
It is the measure lenders use most to judge how heavy a company's debt is against what the business earns. A company holding more cash than debt has negative net debt, which reads as a negative ratio.
Thresholds, their source and the population they were fitted on¶
| Reference | Line | Source |
|---|---|---|
| warning ceiling | about 4 to 5 times | the product's research archive; rating agencies place the start of "highly leveraged" between 4 and 5 times |
- Fitted on: no statistical sample — the agencies' published grids.
- Evidence grade: practitioner convention.
The row draws no bar. The condition summary's Leverage check uses total debt rather than net debt, against a sector band and a 3.0 line, so the two figures differ by design.
A worked example¶
Celestica, as the Fundamentals page showed it on 9 August 2026 (fiscal year 2025): net debt to EBITDA 0.15 — well under the warning ceiling; its debt was nearly matched by its cash.
What “No verdict” means here¶
The row carries no verdict of its own. It reads not applicable when EBITDA is zero or negative, and insufficient data when debt, cash or EBITDA is not stored.
What the verdict is and is not¶
The figure describes the size of the debt against one year's operating profit before write-downs. It is not a credit rating, not a forecast, and not an instruction to trade the shares.