Net debt classroom activity: loan and cash event cards with answers

Prepare three kinds of cards for 40 minutes

Plan five minutes for the definition, ten for three independent events, ten for checks, ten for a continuous sequence and five for an exit question. Give each group a loan card, cash card and trade-payables card. One student moves cards, another calculates and a third checks that the selected components match the definition.

Start with interest-bearing loans of SEK 120 million, available cash of 50 and non-interest-bearing trade payables of 30. Our model defines net debt as loans minus cash. Other financial assets, leases and restricted cash are absent. Keep the payables card on the table, but exclude it from this definition. Real reported measures may include other components.

If the table does not fit, scroll it sideways.

Student worksheet: move two cards and explain

Cover the answer column and start every row from the original cards. New loan proceeds arrive entirely as cash; repayment is paid entirely from that cash. Inventory is bought immediately without creating new payables. The events involve no interest, fees or other payments. Label the restarted cases so they cannot be mistaken for one continuous sequence.

Calculate the loan change, cash change and net debt for every row. Explain in one sentence why a larger loan balance need not mean higher net debt. Ask the checker to deliberately add trade payables in an incorrect calculation. The other students must identify the definition error rather than simply replace the final number.

Answers: loans and cash can change by the same amount

Starting net debt is 120 − 50 = SEK 70 million. Borrowing gives 160 − 90 = 70, while repayment gives 90 − 20 = 70. Both events change loans and cash by equal amounts. The inventory purchase gives 120 − 25 = 95: cash falls while loans remain unchanged.

Adding non-interest-bearing payables would produce 100 at the start and use a different measure. Excluding trade payables from our net-debt definition does not erase the supplier obligation. Unchanged net debt also does not establish unchanged loan terms, maturity dates or ability to make payments. Those questions require information beyond the balances shown on the cards.

Teacher notes: follow three events without resetting

Now start only once, borrow 40, repay 20 and buy inventory for 25. Mark a new balance after each event. This distinguishes the continuous sequence from the table’s independent cases. Trade payables remain 30 throughout; students must not reset either loans or cash between events in this version of the task.

Assess whether students follow loans 120 → 160 → 140 → 140 and cash 50 → 90 → 70 → 45. Ask another group to reconstruct the events from those balances and write a maturity question that the cards cannot answer. Continue with the concept lesson and company guide. The card exercise provides no borrowing or credit-rating feature in Investiq.