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GMS Inc Net debt/EBITDA

What is the Net debt/EBITDA of GMS Inc?

The Net debt/EBITDA of GMS Inc is 9.23

What is the definition of Net debt/EBITDA?



The net debt to earnings before interest, taxes, depreciation, and amortization (Net debt/EBITDA) ratio measures financial leverage and the company’s ability to pay off its debt. It shows how long it would take the company to pay off all its debt with operations at the current level.

The net debt to EBITDA ratio is calculated as Net debt divided by EBITDA. It is similar to the debt to EBITDA ratio, but cash and cash equivalents are subtracted in net debt.

Net debt = short-term debt + long-term debt - cash and cash equivalents
EBITDA = net income + interest expense + taxes + depreciation + amortization

Lower debt debt to EBITDA ratio indicates the company is not heavily indebted and should be able to repay its obligations. Alternatively, higher ratio indicated the company is excessively indebted. The ratio varies between industries as different industries have different capital requirements. Usually, the ratio should be compared to a benchmark or an industry average to determine the company’s credit risk. Generally, a net debt to EBITDA ratio above 4 or 5 is considered high.

Net debt/EBITDA of companies in the Materials sector on NYSE compared to GMS Inc

What does GMS Inc do?

gms is the leading north american distributor of gypsum wallboard, acoustical ceiling products and other specialty building materials. gms operates in 34 states, through a network of 37 subsidiary partners and over 150 distribution centers nationwide, from alaska to florida. when gms opened their doors in 1971, customer service was and continues to be the cornerstone of everything the company does. in total, gms and its subsidiary partners distribute over 10,000 unique products from the industry’s leading manufacturers, all across the nation. in addition to wallboard and acoustical products, gms supplies a comprehensive inventory of other building materials, including frp boards, metal framing, insulation, exterior insulation finish systems, ready-mix joint compound, tools, and various other related interior construction products.

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