A Net debt/EBITDA az Intercept Pharmaceuticals Inc - 6.21
The net debt to earnings before interest, taxes, depreciation, and amortization (Net debt/EBITDA) ratio measures financial leverage and the company’s ability to pay off its debt. It shows how long it would take the company to pay off all its debt with operations at the current level.
The net debt to EBITDA ratio is calculated as Net debt divided by EBITDA. It is similar to the debt to EBITDA ratio, but cash and cash equivalents are subtracted in net debt.
Net debt = short-term debt + long-term debt - cash and cash equivalents
EBITDA = net income + interest expense + taxes + depreciation + amortization
Lower debt debt to EBITDA ratio indicates the company is not heavily indebted and should be able to repay its obligations. Alternatively, higher ratio indicated the company is excessively indebted. The ratio varies between industries as different industries have different capital requirements. Usually, the ratio should be compared to a benchmark or an industry average to determine the company’s credit risk. Generally, a net debt to EBITDA ratio above 4 or 5 is considered high.
we are a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive, non-viral liver diseases, including primary biliary cholangitis (pbc), nonalcoholic steatohepatitis (nash), primary sclerosing cholangitis (psc) and biliary atresia. in a new age of liver disease treatment, our team is developing vital therapies to meet the needs of those living with progressive, non-viral liver disease. we are committed to improving patients’ lives and addressing the liver community’s most pressing needs. our corporate headquarters is located in new york, and we have additional offices in san diego, london and perugia. for more information about intercept, please visit our website at: www.interceptpharma.com and follow us on twitter at: @interceptpharma.