Switch to:
Berkshire Hathaway Inc  (NYSE:BRK.B) Return-on-Tangible-Equity: 8.52%% (As of Sep. 2017)

Return on tangible equity is calculated as Net Income attributable to Common Stockholders divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Equity minus Intangible Assets. Berkshire Hathaway Inc's annualized net income attributable to common stockholders for the quarter that ended in Sep. 2017 was $16,268 Mil. Berkshire Hathaway Inc's average shareholder tangible equity for the quarter that ended in Sep. 2017 was $190,843 Mil. Therefore, Berkshire Hathaway Inc's annualized return on tangible equity (ROTE) for the quarter that ended in Sep. 2017 was 8.52 %%.

NYSE:BRK.B' s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 6.11   Max: 16.11
Current: 10.54

6.11
16.11

During the past 13 years, Berkshire Hathaway Inc's highest Return on Tangible Equity (ROTE) was 16.11%. The lowest was 6.11%. And the median was 12.98%.

NYSE:BRK.B's Return-on-Tangible-Equity is ranked higher than
54% of the 194 Companies
in the Global industry.

( Industry Median: 12.37 vs. NYSE:BRK.B: 10.54 )

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Berkshire Hathaway Inc Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Return-on-Tangible-Equity Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.33 14.13 11.86 13.61 13.61

Berkshire Hathaway Inc Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
Return-on-Tangible-Equity Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 18.97 15.48 9.29 9.30 8.52

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Berkshire Hathaway Inc's annualized Return on Tangible Equity (ROTE) for the fiscal year that ended in Dec. 2016 is calculated as

ROTE=Net Income attributable to Common Stockholders/( (Total Tangible Equity+Total Tangible Equity)/ 2 )
(A: Dec. 2016 )  (A: Dec. 2015 )(A: Dec. 2016 )
=Net Income attributable to Common Stockholders/( (Total Equity - Intangible Assets+Total Equity - Intangible Assets )/ 2 )
(A: Dec. 2016 )  (A: Dec. 2015 )(A: Dec. 2016 )
=24074/( (183694+170034 )/ 2 )
=24074/176864
=13.61 % %

Berkshire Hathaway Inc's annualized Return on Tangible Equity (ROTE) for the quarter that ended in Sep. 2017 is calculated as

ROTE=Net Income attributable to Common Stockholders/( (Total Tangible Equity+Total Tangible Equity)/ 2 )
(Q: Sep. 2017 )  (Q: Jun. 2017 )(Q: Sep. 2017 )
=Net Income attributable to Common Stockholders/( (Total Equity - Intangible Assets+Total Equity - Intangible Assets)/ 2 )
(Q: Sep. 2017 )  (Q: Jun. 2017 )(Q: Sep. 2017 )
=16268/( (187264+194422)/ 2 )
=16268/190843
=8.52 % %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

In the calculation of annual return on tangible equity, the net income attributable to common stockholders of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Sep. 2017) net income attributable to common stockholders data. Return on Equity is displayed in the 10-year financial page.


Explanation

Return on Tangible Equity (ROTE) measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). ROTE shows how well a company uses investment funds to generate earnings growth. ROTEs between 15% and 20% are considered desirable.


Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its return on tangible equity by having more financial leverage, it is important to watch the leverage ratio when investing in high ROTE companies. Like Return-on-Tangible-Asset, ROTE is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROTEs can be extremely high.


Related Terms


Headlines

From the Internet

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK