Net Debt to EBITDA Ratio
Calculates the net debt to EBITDA ratio, which measures the net debt of the company relative to its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
The net debt to EBITDA ratio is a measure of a company’s ability to manage its debt obligations in relation to its earnings and cash flow. A lower ratio indicates better financial health and a stronger ability to manage debt.
The formula is as follows:
\[\text{Net Debt to EBITDA Ratio} = \text{Net Debt} / \text{EBITDA}\]Net Debt to EBITDA Ratio in Python
get_net_debt_to_ebitda_ratio is part of the Ratios module of the open-source Finance Toolkit. Install it with:
pip install financetoolkit -U
Then call get_net_debt_to_ebitda_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")
net_debt_to_ebitda_ratios = toolkit.ratios.get_net_debt_to_ebitda_ratio()
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| AAPL | 0.8449 | 0.8337 | 0.7468 | 0.6618 | 0.5281 |
| TSLA | -0.9225 | -0.6108 | -0.5034 | -0.2022 | -0.7747 |
Parameters
get_net_debt_to_ebitda_ratio accepts the following parameters:
- rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
- growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
- lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
- standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
- trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.