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How many years of cash flow (FCF) are needed to pay off net debt (LT debt minus cash)?
The most practical way to evaluate debt and minimize cash burn.
More than 4 years and it's worth investigating.
An excessive cash position may be a red flag.
Lack of present investment may result in lower returns in the future.
How to measure: how many years of net income does the company hold in cash?
Over 2 years' worth and it's worth investigating.
Cash can also offset the debt.
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