shalab Posted August 6, 2017 Share Posted August 6, 2017 Someone posted this in the fool's board - thought it is an interesting way to look at BRK. BTW, the book value is not adjusted for KHC market value still. A gap of 12 B pre-tax or about 9B after tax. ----- Here's a fun way to look at how well they've done lately, and a way of thinking about the cash drag: A year ago, Berkshire as a whole had shareholders' equity of $263,025m. Of that, $72,679m was cash which has earned nothing and is still there: the start-of-period dead weight. So, the "shareholders' assets that produced any earnings" were at $190,346. That still includes tons of goodwill and intangibles. Shareholders' assets are now at $300,659, up $37,634 in a year. So, the increase in shareholders' equity represents net earnings of 19.8% on the starting equity at work. Thought of as a type of after-tax return on capital employed, that's a wonderful number. It's only 14.3% increase on the entire starting equity balance. So, the cash drag can be estimated as 5.5% in this quite good year. That's a pretty high estimate, as Berkshire would have no financial credibility without some big chunk of it. Link to comment Share on other sites More sharing options...
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