1. What Are Net Borrowings?

Net Borrowings represent the difference between new debt taken on and debt repayments made during a specific period. It's a key metric in financial analysis that shows whether a company is increasing or decreasing its debt position.

2. How Does the Calculator Work?

The calculator uses the Net Borrowings formula:

Where:

• New Debt — Total amount of new debt issued during the period
• Repayments — Total amount of debt repaid during the period

Explanation: A positive result indicates the company has taken on more debt than it repaid (net increase in debt), while a negative result shows the company repaid more debt than it took on (net decrease in debt).

3. Importance of Net Borrowings Calculation

Details: Net Borrowings is crucial for understanding a company's financing activities, assessing its capital structure changes, and evaluating its debt management strategy.

4. Using the Calculator

Tips: Enter the total amount of new debt and repayments in dollars. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find new debt and repayment figures?
A: These figures are typically found in the cash flow statement under financing activities.

Q2: What does negative net borrowings mean?
A: Negative net borrowings means the company repaid more debt than it took on during the period.

Q3: How often should net borrowings be calculated?
A: It's typically calculated for each financial reporting period (quarterly or annually).

Q4: Does this include all types of debt?
A: Yes, it should include all forms of debt (short-term and long-term) unless specified otherwise.

Q5: How is this different from net debt?
A: Net borrowings measures the change in debt during a period, while net debt is the total debt minus cash at a point in time.