Business & pro

Debt ratio and solvency

How much debt your business carries and how able it is to repay it.

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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.