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Hi John,
Thanks for the free worksheet etc. just starting to use it, I’ve thought of something like this myself but never got round to devising one. One question though, in the low debt section, why are you adding cash to net debt? I would have thought cash should have been deducted from net debt as this could be used to reduce said debt. Maybe I’m missing something?
John
Hi John
I must admit it’s a bit ambiguous. What I mean is to add the absolute values of cash and net debt to give total interest bearing debt (borrowings). So if there is net debt of minus £100m and cash of plus £20m then there is £120m of borrowings. Going the other way, if you start with £120m of total borrowings and subtract the £20m cash you get £100m net debt.
I’ll get it re-worded. Thanks for letting me know,
John
Just updated it to say:
“Total borrowings. You can calculate this by adding the absolute values of cash and net debt. If the company has net cash then subtract cash from it.”
Hopefully that’s a bit clearer. And also mentioned that it won’t work for all companies, e.g. finance.