- Leverage Ratio = Net Debt / Short-Term Liabilities – Cash
- Net Debt = Debt – Cash
- It shows the weight of Net Debt (Borrowing – Cash) in relation to
- Net Short-Term Liabilities (Short-Term Liabilities – Cash)
Business actions to improve the Index
- Increase Cash through
- Liquidation of Fixed Assets, (Decrease in Fixed Assets) or through Collection of Balances, (Decrease in Receivables), or through Increase in Cash Sales, or through Increase in Share Capital.
- Cost Reduction
- Reduction of Bank Borrowing, either by repayment of liabilities (Share Capital Increase), or by restructuring debt from short-term to long-term.
- Increase in Short-Term Liabilities through an increase in Supplier Credit
