This workout asks us to calculate net debt for both periods.

We have been given a balance sheet for year 9 and year 8 and I'm going to start my net debt calculation by identifying current debt items.

So I go down to the liabilities and equity section and I start with current liabilities and we can see the very first item short-term borrowings.

That is definitely debt.

So 2708 for year 9 will be included in my calculation looking at the next few items accounts payable, accrued liabilities, accrued income taxes.

Those are all operating current liabilities and are not debt related.

But then we have long-term debt due within one year, which is definitely debt 2745 in year 9 and capital lease and financing obligations due within a year. That is also a debt related item.

551 in year 9 let's go put that into our calculation and I've already started that below.

So we've got short-term borrowings, long-term debt due within one year and capital lease due within one year.

Now we need to identify any long-term liabilities that are debt or debt related.

Going back up to the liability section of our balance sheet we have got long-term debt of 38,214 in year 9 that is definitely debt.

And we also have long-term capital lease and financing obligations, which is also date related of 5816 in year 9 there are no other long-term debt items.

So let's go put those into our calculation.

Our long-term debt for both years and our long-term capital lease for both years.

The last thing we need to do before we can calculate net debt.

Is find any cash or cash equivalents? Now I know that's going to be in the asset part of my balance sheet more specifically in the current asset part of my balance sheet and we can see the very first item. We have cash and cash equivalents of 8705 for year 9.

I will just have a look through the other current assets to see if any of them are casual cash equivalents, but we can see here. We've only got receivables inventories and prepaid expenses all of which are operational in nature.

So if we come down and put our cash and cash equivalents into our calculation All that's left for us to do is to calculate the net.

debt And we know that net debt is total debt minus cash and cash equivalents.

So I'm going to sum up my total debt.

And I'm going to take off the cash and cash equivalents.

And that gives us net debt of 41 329 for year 9.