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Stocks B / Berkshire Hathaway

URL:  https://boards.fool.com/first-three-quarters-all-of-the-data-with-the-34053385.aspx

Subject:  Re: Maystery purchase Date:  11/4/2018  2:51 PM
Author:  mungofitch Number:  239441 of 240601

First three quarters, all of the data with the tax cut, ROA 0.85% and ROE 7.43%. That I wouldn't buy.

Jim, I don't know where you got those numbers but here are the numbers for the first three quarters straight from the source: ROA 1.2%, ROE 10.86%, ROTCE 15.3%


I read their balance sheet and calculated it myself.
From third quarter 10Q page 54-57.

Total assets Dec 31 2017, 2,281,234
Total assets Sep 30 2018, 2,338,833
Average of two as a proxy for average assets during the period = 2,310,034
Net income for the nine month period attributable to common shareholders, p 54: 19,657
Divide the two and you get ROA 0.85%.

Same method for ROE:
Total shareholders' equity Dec 31 2017, 267,146 from page 57
Total shareholders' equity Sep 30 2018, 262,158
Average of two as a proxy of average equity: 264,652
Net income for the nine month period attributable to common shareholders, p 54: 19,657
Divide the two and you get ROE 7.43%.

I consider preferred dividends as a cost of business like interest, not any kind of net income return to equity...depends what meaning you're looking for.
But that makes only a small difference. 0.05% ROA.

Their reported numbers are admittedly...different.
They say "Return on average allocated capital is calculated as net income, adjusted for cost of
funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital.
Other companies may define or calculate these measures differently."

Well, I'm not a company, but I do indeed calculate it differently.
I calculate ROA and ROE by dividing net income to common by total assets or common equity.

Jim
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