Net Debt Per Equity Ratio

ND/EQ = (interest bearing debt – cash) / net ordinary share equity. This represents the level of risk associated with the company’s funding source. Generally speaking, the lower the ratio, the less financial risk to the company (ie the more attractive the company) . As a rule of thumb, a ratio of 35% or lower is deemed attractive. A figure above this requires further investigation.

Related definitions:

Equity Per Ordinary Share

Equity Ratio

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