---
title: "Definition of ND/EBITDA"
url: https://signalscreener.fr/definition/net-debt-ebitda/
markdown_url: https://signalscreener.fr/definition/net-debt-ebitda.md
description: "The ratio of net debt (total debt minus cash) to EBITDA, showing how many years of earnings are needed to pay off debt."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "ND/EBITDA"
  - "Net Debt to EBITDA"
translations:
  de: https://signalscreener.fr/de/definition/net-debt-ebitda.md
  es: https://signalscreener.fr/es/definition/net-debt-ebitda.md
  fr: https://signalscreener.fr/fr/definition/net-debt-ebitda.md
---

# Net Debt to EBITDA

## What is ND/EBITDA?

The ratio of net debt (total debt minus cash) to EBITDA, showing how many years of earnings are needed to pay off debt.

## Think of it like this

Like knowing how many years of your salary it would take to pay off your mortgage after using your savings.

## Formula

```
Net Debt/EBITDA = (Total Debt - Cash) ÷ EBITDA
```

- **Total Debt**: Short-term + long-term debt
- **Cash**: Cash and cash equivalents
- **EBITDA**: Earnings before interest, taxes, D&A

## Why it matters

- Standard leverage metric for credit analysis
- Used in loan covenants
- Shows debt serviceability
- Rating agencies watch this closely

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 1.0x | Conservative | Very low leverage |
| 1.0-2.0x | Moderate | Healthy balance sheet |
| 2.0-4.0x | Elevated | Meaningful leverage |
| > 4.0x | High | Significant debt burden |

## Real-world example

A company with $3B net debt and $1B EBITDA has 3.0x leverage - 3 years to pay off debt.

---

This is educational content, not financial advice.

Source: [Definition of ND/EBITDA](https://signalscreener.fr/definition/net-debt-ebitda/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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