Final answer:
Net Debt of a company is calculated by subtracting Cash from Gross Debt.
Explanation:
Net Debt of a company is calculated by subtracting the company's Cash from its Gross Debt. This provides a more accurate representation of the company's financial obligations excluding the cash reserves it holds.
For example, if a company has a Gross Debt of [tex]$1,000,000 and Cash of $[/tex]200,000, the Net Debt would be [tex]$800,000 ($[/tex]1,000,000 - $200,000).
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