Net Debt Paydown Yield

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Definition

The change of total debt a company has paid down relative to its market capitalization over the last twelve months.

Companies with a high net debt paydown yield indicate companies that are paying off a significant portion of its debt over time.

Formula

Change in the average last four quarters of total debt (current portion and the long term portion of debt) compared to the previous avg of last four quarters. Let's say a company has an average of 12 million of total debt on March 31st 2013 (We'll average the total debt period between March 31st, 2013 and March 31st, 2012).

If a company has an average of 10 million of total debt on June 30th 2013 (We'll average the total debt between June 30th 2013 and June 30th 2012).

The difference between debt and the two periods is approximately two million. If the company has a market cap of twenty million, 2/20 would indicate a net debt paydown yield of 10%.

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