Debt magnifies outcomes and reduces flexibility.
| Concept | Explanation | |---|---| | Gross debt | Total interest-bearing borrowings. | | Net debt | Debt minus cash and cash-like investments. | | Debt-to-equity | Debt relative to book equity. | | Debt-to-EBITDA | Debt relative to a common operating earnings proxy. | | Maturity profile | Timing of required repayments. | | Covenant | Contractual condition imposed by lenders. |
Leverage magnifies equity outcomes. Debt can improve returns in favorable conditions but reduces flexibility and increases refinancing risk.