NZX leverage comparison

Investor question

How much balance-sheet debt is supported by current operating earnings, and is that burden rising or falling?

What it measures

The table pairs reported net debt with net debt divided by the company's EBITDA-equivalent earnings measure. It distinguishes conventional leverage from net cash and compares the latest position with the filing's source-backed prior period. It deliberately does not invent an interest-cover ranking where comparable finance-cost definitions are unavailable.

How to read it

1. Use the ratio to compare debt with earnings capacity, then check the absolute net-debt balance for scale.
2. For net-cash companies, focus on whether the cash buffer is growing, being invested, or being returned to shareholders.
3. A falling ratio is strongest when both debt falls and recurring earnings remain resilient; denominator growth alone can reverse quickly.

Common distortions

• Seasonal borrowings or a reporting-date working-capital peak can overstate or understate through-cycle debt.
• Acquisitions, disposals, capital expenditure, and lease-accounting choices can interrupt period-to-period comparability.
• Negative or unusually small EBITDA makes net debt to EBITDA non-meaningful even when the debt balance remains important.

Questions to ask next

• What cash flow is available for debt reduction after maintenance investment?
• Are maturities, covenants, refinancing terms, or committed capital spending material to the risk?
• Is leverage moving because of operating performance, capital allocation, or reporting-date timing?