In Berkshire Hathoway annual reports, Warren Buffet highlights financial tenants that he believes are important. Which of the following is not a financial tenant of Warren Buffet?
A) Focus on return on equity (ROE) not earnings per share (EPS).
B) Calculate owner earnings similar to free cash flow after capital expenditures.
C) High profit margins relative to the industry.
D) Company should create at least one dollar of market value for every dollar retained.
E) All of the above are financial tenants of Warren Buffet.

Question

Quizplus · Accepted Answer

All the options listed (A, B, C, D) are indeed financial tenets that Warren Buffett has emphasized in his letters to Berkshire Hathaway shareholders. Buffett has long advocated for focusing on return on equity rather than earnings per share, understanding owner earnings as a measure of intrinsic value, the importance of high profit margins, and the efficient use of retained earnings to create shareholder value.

In Berkshire Hathoway Annual Reports, Warren Buffet Highlights Financial Tenants