Debt ratio and solvency
How much debt your business carries and how able it is to repay it.
How it works
Gearing = net debt / equity. Net debt / EBITDA = years to repay (banks like < 3). Solvency = equity / total assets (ideally > 30%).
Results are for guidance only and do not replace professional advice.
Worked example
With the default values:
- Equity250000
- Financial debt300000
- Cash50000
- Annual EBITDA110000
- Total assets700000
you get:
- Net debt / EBITDA2.27 years
- Gearing (net debt / equity)100 %
- Net debt€250,000.00
- Solvency ratio35.7 %
Frequently asked questions
How does the “Debt ratio and solvency” tool work?
Gearing = net debt / equity. Net debt / EBITDA = years to repay (banks like < 3). Solvency = equity / total assets (ideally > 30%).
What do I need to enter?
Just fill in: equity, financial debt, cash, annual ebitda, total assets. The result updates as you type.
Can you give an example?
Equity: 250000; Financial debt: 300000; Cash: 50000; Annual EBITDA: 110000; Total assets: 700000 → Net debt / EBITDA: 2.27 years; Gearing (net debt / equity): 100 %.
Is this calculator free, and is my data private?
Yes. HOD Calc is completely free with no sign-up. The calculation runs in your browser: nothing you type is sent or stored.