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10th Jul '22 by jjn388672

9 comments 627 reads

Hi. Not sure if I'm posting in the right place, but here goes. I've noticed that your net debt calculation seems to be in contradiction with definitions I've seen elsewhere. What am I missing here?

E.g. for MJ Gleeson (GLE), net debt (latest) is shown as -38.2, but the balance sheet (interim) lists:

total liablities = 65.1 (of which payable/accrued 60.1)

cash and equivalents = 38.2

Shouldn't net debt = 65.1 - 38.2 = 26.9

It seems like a big chunk of debt is being missed.

Thanks for any help.

https://www.investopedia.com/t...

ADVFN, e.g., define net debt as

Net Debt

Net Debt, is defined as total

liabilities minus cash & equivalents. The formula is the following

and the figures are expressed in millions:

= total liabilities - cash & equivalents

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About the Author

Jjn388672

Premium Member

9 comments

Michael C

11th Jul '22

I have been wondering the exact same thing but didn't say anything in case I made a fool of myself. Either I'm not foolish or I have misunderstood what Stockopedia says in its own definition: here

I haven't got any examples to hand but on a couple of occasions I have come up with a different figure on a balance sheet than Stocko has.

AnonymousUser1822519

11th Jul '22

Michael , if your cared for it, in your CV you would write "Swing Trader" not "Month Trader" . Sounds a touch more cool perhaps.

TheGob

11th Jul '22

i don't think your definition is correct ....total liabilities<>debt which is what your definition states. Debt is a subset of total liabilities.

Megan Boxall

12th Jul '22

Hi,

Thank you for your question.

Net debt is calculated by taking the short and long term debt, plus any notes payable and preferred equity, minus total cash and short term investments.

The -£38.2m figure on the StockReport actually shows that MJ Gleeson has net cash of £38.2m. That is a little bit out as it doesn't account for the £4m of lease liabilities (the company reported net cash of £35.1m at the interim stage), which are not included in our definition. We don't need to take all the liabilities in the definition of net debt.

I hope that helps,

Megan

jjn388672

19th Jul '22

Thanks for your reply. Does it help? Yes and no. I am trying to use net debt for a screen and am finding that, in some cases, I just can't see how it's been calculated. Let's take as an example £PHTM. Using the 2021 number, the currently stated net debt on the stockreport is -34.9. I just can't see how this number has been worked out from the numbers on the balance sheet.

The Photo-Me International (LON:PHTM) interim was released this morning and I am at a loss as to how I can calculate a net debt figure to enable me to make valid comparison to the previously stated one.

http://newsfile.refinitiv.com/...

Oliver Cooper

20th Jul '22

The calculation of Net Debt for PhotoMe uses items in the Balance Sheet below:

For 2021 this would be 64.4 - 99.4 = -35.0. The difference from the -34.9 on the Financial Summary is simply rounding.

I hope this helps.

jjn388672

20th Jul '22

Hi Oliver, thanks for that. Yes, it does help, in part. I was trying to work out a directly comparable figure from the latest interim I linked to above. I'm guessing that you must use more detailed accounts to get your "total debt" as I can't see a way to come up with it for 2021's numbers (RH column) from the following (taken from the interim):

Anyway, I think I'm getting into rabbit-hole territory here, so I'll give up for now, as I feel I've already wasted too many people's time on this.

Thanks to everyone who replied.

jjn388672

20th Jul '22

I'm guessing (hoping?) that after Stockopedia crunch the numbers they hoover up and apply their algorithms that spit out the net debt, that we end up with a number that can be used reliably for comparisons across different stocks.

jjn388672

20th Jul '22

Thanks, I think you've picked up where I was originally going wrong, although, tbf, it wasn't my definition. I found this definition which I think is the "right" one.

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Net debt definition?

Net Debt

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Jjn388672

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