Net debt

Net debt is calculated as short and long-term interest-bearing debt minus cash (and equivalents) The concept of net debt is the same under cash and accrual-based financial reporting. High levels of net debt impose a call on future revenue flows to service that debt. One shortcoming of the net debt concept is that it does not provide information on whether debt has been incurred to finance fixed asset accumulation or current expenditure.
Calculation:
debt due within one year excluding bank overdrafts
+ debt due after one year
- cash in hand and at bank
- overnight deposits
+ bank overdrafts
+ other current investments
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Net debt