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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch 🐝🐝🐝 GOLD
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Number: of 21939 
Subject: Re: IV and growth estimates
Date: 05/05/26 11:13 AM
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Anyone have yearly ROE numbers for Berkshire?

In effect, Berkshire's ROE is simply the percentage increase in shareholders' equity each year because there are no dividends. The main adjustment is that the increase should include any amount spent during the year on share buybacks.

So, for example, in FY 2025, (ending shareholders' equity + buybacks)/(starting shareholders' equity) - 1 = (717419 + 0)/649368-1 = 10.5%

You then have to decide how many "one off" items to exclude. For example, the increase in book due to the decrease in deferred tax liability when tax rates changed at end 2017 was not meaningful for an assessment of the quality of business efficiency. But a write-off is probably meaningful, you just have to remember that it's non-recurring. Sometimes you can get a good idea by spreading those out over time like a 4 year straight line amortization.

One could make a case that dividing the company into investments and "other than investments" and doing the calculation separately might give a better idea--you'd find the ROE of the operating side much steadier--but it's not 100% obvious how to do the split when considering things like debt and float liabilities.

Jim
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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