Net debt is a widely used metric to measure a company’s current financial position in relation to its debt. As the name suggests, net debt is the amount of cash a company would be left with after all debts have been paid off. Companies that carry high levels of net debt can appear risky to investors and lenders and can be subject to higher borrowing costs, making it an important metric to consider when evaluating a company's debt position.

Net debt appears on a company's balance sheet and is calculated by subtracting all cash and cash equivalents from its total short-term and long-term debt. It is important to note that cash and cash equivalents include more than just actual cash, but also any short-term investments – such as certificates of deposit and treasury notes – that can be immediately converted into cash when needed. Net debt can also be adjusted for the value of restricted cash, which are funds set aside for specific purposes and are not available for general use.

Net debt is an important metric for both companies and investors as it provides an indication of the amount of liquidity a company has on hand as well as its ability to pay off all its debts. High levels of net debt can factor into credit ratings and debt covenants and can lead to increased borrowing costs or additional restrictions. Companies with higher levels of net debt are often viewed as riskier investments by investors, as they can impact the company's ability to finance operations or investments.

In summary, net debt is a liquidity measure that helps companies track their debt position and serves as an important metric for both companies and investors. It is calculated by subtracting all available cash and cash equivalents from a company's total short-term and long-term debt, and can provide an indication of the amount of liquidity a company has to cover its debt obligations. Companies with higher levels of net debt can lead to higher borrowing costs, making them a riskier investment for potential investors.