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  • Writer's pictureACC.PRO VIETNAM

What is your ratio of net profit / total long-term debt?

Often companies with sustainable competitive advantages need little or no long-term debt to sustain their business

and therefore also little or no long-term debt due.


According to Warren, companies are highly profitable, so they can fund themselves when they need to expand or buy another company, so there's no need to borrow in large sums.

If the company has had ten years of operation with little or no long-term debt on the balance sheet, it is very likely that the company has some strong competitive advantage and is doing business in a familiar field. .

Warren's historic stock purchases suggest that the company should have an annual net profit of any given year to pay off all long-term debt in three or four years.


A company with little or no long-term debt is often a good long-term business

Warren Buffett

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