In Berkshire Hathoway Annual Reports, Warren Buffet Highlights Financial Tenants

question 79

Multiple Choice

In Berkshire Hathoway annual reports, Warren Buffet highlights financial tenants that he believes are important. Which of the following is not a financial tenant of Warren Buffet?

• A) Focus on return on equity (ROE) not earnings per share (EPS).
• B) Calculate owner earnings similar to free cash flow after capital expenditures.
• C) High profit margins relative to the industry.
• D) Company should create at least one dollar of market value for every dollar retained.
• E) All of the above are financial tenants of Warren Buffet.

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Definitions:

Organizational Environment

The external and internal factors that influence the operations, culture, and success of an organization.

Economic Factors

Elements that influence the performance of an economy, including but not limited to inflation rates, interest rates, government policy, employment levels, and GDP growth.

Share A Culture

Involves the collective sharing and transmitting of values, beliefs, customs, practices, and social behaviors within a community or society.

Systematically Murder

The planned and organized act of killing individuals or groups, often signifying an underlying motive or policy.