Warren Buffett
Owner earnings, return on equity, and as little debt as possible.
| Measure | Formula | Median | Middle half | Reporting it |
|---|---|---|---|---|
| Owner earnings | Net income + depreciation & amortisation − capital expenditure | $632.00m | $11.63m – $2.14bn | 514 |
| Return on equity | Net income ÷ shareholders’ equity | 11.7% | 6.3% – 20.4% | 537 |
| Debt to equity | Total debt ÷ shareholders’ equity | 0.79x | 0.39x – 1.45x | 442 |
| Operating margin | Operating income ÷ revenue | 15.0% | 6.0% – 24.7% | 516 |
Where each comes from
| Owner earnings | Defined in the 1986 letter’s appendix: reported earnings plus depreciation and amortisation, less the capital spending the business needs to hold its position. He notes in the same passage that the last term must be an estimate. |
|---|---|
| Return on equity | The 1979 letter: “we believe a more appropriate measure of managerial economic performance to be return on equity capital” — stated against earnings per share, which he argues rises on retained earnings alone. |
| Debt to equity | Consistently against leverage; the 1987 and 1990 letters describe avoiding debt that could force a sale at the wrong moment. |
| Operating margin | The durability question — whether a business can hold its prices. Described as the moat from the 1993 letter onward. |
Source: Berkshire Hathaway shareholder letters, 1977–present.
What this cannot tell you
Price paid. “A wonderful company at a fair price” is half a valuation judgement; the price half is yours to supply in the box on any company page, since this site holds no prices.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics