ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Berkshire Hathaway's annualizedNet Income for the quarter that ended in Sep. 2024 was $105,004 Mil.
Berkshire Hathaway's average Total Assets over the quarter that ended in Sep. 2024 was $1,128,056 Mil. Therefore, Berkshire Hathaway's annualized ROA % for the quarter that ended in Sep. 2024 was 9.31%.
The historical rank and industry rank for Berkshire Hathaway's ROA % or its related term are showing as below:
BRK.A'
s ROA % Range Over the Past 10 Years
Min: -2.39 Med: 4.75 Max: 10.67
Current: 9.87
During the past 13 years, Berkshire Hathaway's highest ROA % was 10.67%. The lowest was -2.39%. And the median was 4.75%.
BRK.A's ROA % is ranked better than 93.18% of 484
companies
in the Insurance industry
Industry Median: 2.395
vs BRK.A: 9.87
Berkshire Hathaway ROA % Historical Data
The historical data trend for Berkshire Hathaway's ROA % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Berkshire Hathaway's ROA %
For the Insurance - Diversified subindustry, Berkshire Hathaway's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
Berkshire Hathaway's ROA % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Berkshire Hathaway's ROA % distribution charts can be found below:
* The bar in red indicates where Berkshire Hathaway's ROA % falls into.
Berkshire Hathaway ROA % Calculation
Berkshire Hathaway's annualized ROA % for the fiscal year that ended in Dec. 2023 is calculated as:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Sep. 2024) net income data.
ROA % is displayed in the 30-year financial page.
Berkshire Hathaway (NYSE:BRK.A) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Sep. 2024) net income data. The Revenue data used here is four times the quarterly (Sep. 2024) revenue data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Berkshire Hathaway ROA % Related Terms
Thank you for viewing the detailed overview of Berkshire Hathaway's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.
Berkshire Hathaway is a holding company with a wide array of subsidiaries engaged in diverse activities. The firm's core business segment is insurance, run primarily through Geico, Berkshire Hathaway Reinsurance Group, and Berkshire Hathaway Primary Group. Berkshire has used the excess cash thrown off from these and its other operations over the years to acquire Burlington Northern Santa Fe (railroad), Berkshire Hathaway Energy (utilities and energy distributors), and the companies that make up its manufacturing, service, and retailing operations (which include five of Berkshire's largest noninsurance pretax earnings generators: Precision Castparts, Lubrizol, Clayton Homes, Marmon, and IMC/ISCAR). The conglomerate is unique in that it is run on a completely decentralized basis.
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