Glossary
What is net debt?
Definition
Net debt is total debt minus cash and short-term investments at a balance-sheet date. A negative result means cash exceeds debt and is shown as net cash. For example, PepsiCo's net debt at the end of FY2025 (ended 27 Dec 2025) was USD 39.7 billion, our calculation from its Form 10-K.
Formula
Net debt = Total debt − Cash and short-term investments
Net debt subtracts cash and short-term investments from total debt, at the same balance-sheet date. Total debt adds the borrowings due within a year, shown under current liabilities, to long-term debt under non-current liabilities.[1] Cash and short-term investments come from current assets: cash and cash equivalents plus short-term investments, marketable securities or debt securities.
A negative result is net cash: cash and short-term investments are larger than total debt. Unlike free cash flow, which covers a period, net debt is a balance at a single date.
Worked example: PepsiCo
This example calculates net debt from PepsiCo's balance sheet at the end of its latest fiscal year. Total debt is our sum of PepsiCo's short-term debt obligations and long-term debt obligations. PepsiCo prints no subtotal for cash and short-term investments, so we add its cash and cash equivalents to its short-term investments.
To get net debt, subtract cash and short-term investments from total debt. All three figures in the table carry the D marker (derived by StockFactsheet), because we build each of them rather than copy a printed line. How to read a 10-K shows where the audited balance sheet sits in a Form 10-K.
| USD m | FY2025at |
|---|---|
| Cash and short-term investments | 9,530 D |
| Total debt | 49,182 D |
| Net debt / (net cash) | 39,652 D |
Source: PepsiCo Form 10-K for FY2025, SEC EDGAR
- D Cash and cash equivalents plus the short-term investments, current marketable securities or current debt securities the filing tags, from the same filing.
- D Total debt = short-term debt + long-term debt, from the same filing.
- D Net debt = total debt minus cash and short-term investments; a negative value is net cash.
All periods: PepsiCo balance sheet
How StockFactsheet calculates it
StockFactsheet calculates net debt at each balance-sheet date from its inputs as reported, with no adjustments. For cash and short-term investments, we use the filing's own subtotal where it reports one. Otherwise we add its short-term investments, marketable securities or debt securities line to cash and cash equivalents as tagged, without a check of what it contains. A line tagged as equity securities is never included.
Total debt includes finance-lease liabilities where they are part of a company's debt line, and it excludes operating leases. We build it by adding short-term and long-term debt from the same filing, and use a reported total only when those parts are not tagged. Net debt is a balance at a single date, so it has no trailing 12 months (TTM) figure. The full rule is in our methodology for net debt.
Common mistakes
- Reading net debt as everything a company owes: it leaves out operating leases, pension obligations and trade payables, which sit on other lines of the balance sheet.
- Comparing our net debt with a company's own net debt figure as if they matched: IFRS Standards do not define debt, so a company's own measure can include other items.[2]
- Treating every fall in net debt as a sign that borrowings were repaid: net debt also falls when cash and short-term investments rise while total debt stays the same.
- Taking a fiscal year-end balance as typical of the whole year: net debt is measured on the last day of a period, and cash can change between quarter ends.
Sources and data
The references explain the term; the worked example's figures are as reported in the filings after them. Derived figures are our calculations (see Methodology).
(opens in new tab)- [1] Reference Beginners' Guide to Financial Statements
- [2] Reference Feature: Changes in financing liabilities—what does good disclosure look like?
- [3] Filing Form 10-K, fiscal year ended 27 Dec 2025
- [4] Our dataset StockFactsheet fundamentals dataset, extracted from SEC EDGAR XBRL on ; derived values (Q4, TTM, free cash flow, net debt, margins, growth rates and ratios) are explained in Methodology.
Cite this page
StockFactsheet (2026). "What is net debt?" Signed off by OffScriptBySami. Updated ; data as of . https://stockfactsheet.com/learn/net-debt/
For information only. StockFactsheet does not recommend buying, selling or holding any security. Figures can contain errors; always check the original filings. Full disclaimer
Update history
- Published First published version.