In the book Warren Buffett and the interpretation of the financial statements, Mary Buffett explained companies that have enough earning power to be able to pay off their long-term debt in three or four years are good candidates in our search for exceptional companies with a sustainable competitive advantage.

Question: How could I compute if the company has enough earning power to pay off their long-term debt in less than 4 years? Do I have to divide the long-term debt by the net income? For instance, for Coca-Cola in Decembre 2021, the long-term debt is about 38,130 M dollars and its net income is 9,771 M dollars. So for Coca-Cola, they are able to pay their long-term debt in about less than four years. Does it make sense?



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