Berkshire Hathaway

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Berkshire Hathaway is an American multinational conglomerate holding company that oversees and manages various subsidiary companies (Berkshire Hathaway, 2011). The current members of the Board of Directors are Warren Buffett, Charlie Munger, Walter Scott Jr., Thomas Murphy, Howard Graham Buffett, Ronald Olson, Donald Keough, Charlotte Guyman, David Gottesman, Bill Gates, Stephen Burke, and Susan Decker (Berkshire Hathaway Inc., 2011). The primary job of the Board of Directors is to see that the right people are running the business and to be sure that the next generation of leaders is identified and ready to take over tomorrow (Berkshire Hathaway, 2011). Another important duty of Board of Directors is to ensure that there is…show more content…
The earnings before interest expense for 2011 are $681 million and for 2010 was $369 million. In 2009, Leucadia had a negative income before interest expense totaling $251 million.
The DuPont identity provides insight into factors affecting the return on equity (ROE) of a company. The DuPont equation decomposes ROE as net margin by multiplied asset turnover times’ asset to equity ratio. Net margin indicates the operating efficiency (Stock Pup, 2012). Asset turnover measures the total asset use efficiency and the asset to equity ratio is a measure of financial advantage. Leucadia National DuPont identity calculates for the years 2009, 20101 and 2011 to 1.88%, 12.9% and 55.39% respectively. We were unable to calculate the DuPont identity for Berkshire Hathaway from their income statements and balance sheets for the last three years as the inventory and cost of goods sold fields were blank. However, if we look at Table 1 we can see the DuPont identity in graph format for Berkshire Hathaway (Stock Pup, 2012).
Table 1 Berkshire Hathaway Inc.

Estimated Growth Rate

To calculate estimated growth rate in earnings and dividends for Berkshire Hathaway, we need to look at the historical data for this organization for the last five years. Starting from 2007 to 2011 the net income for Berkshire Hathaway

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