Net Debt / EBITDA
How many years of core earnings it would take to pay off net debt, a key gauge of leverage burden.
What it is
This ratio measures net debt against EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization, a rough proxy for operating cash generation. It expresses leverage in terms of years: a value of 3 means net debt is about three times annual core earnings. Lenders use it heavily in loan covenants.
Why it matters
It tells you whether a company's debt is manageable relative to the cash its operations throw off, which matters more for repayment than the absolute dollar amount of debt. Lower is generally safer; many lenders get cautious above roughly 4 to 5 times, though comfortable levels vary by industry stability. A weakness is that EBITDA ignores real cash costs like interest, taxes, and capital spending, so it can flatter highly capital-intensive businesses.
How it's calculated
Divide net debt (total debt minus cash) by trailing twelve-month or annual EBITDA.
How Quintarthai uses it
Net Debt / EBITDA appears in the enterprise-value and leverage ratios on a company's deep-analysis page, and Quinn references leverage like this in its risk-first analysis.