Berkshire Hathaway Inc.

Topics: Generally Accepted Accounting Principles, Balance sheet, Asset Pages: 5 (1753 words) Published: June 9, 2010
Berkshire Hathaway Inc. – Executive Summary
This team has been assigned to perform an executive summary of Berkshire Hathaway Inc. (BHI). This company has been profitable for the last three fiscal years, and is on the U.S. Stock Exchange. This summary will contain information gathered from BHI’s most recent annual report. Using the company’s balance sheet, cash flow statement, and income statement (all three are attached following the references) 14 key areas will be addressed: 1. Company history| 2. Audit firm|

3. Stock exchange| 4. Cash and cash equivalents|
5. Total current assets| 6. Two largest current assets| 7. Total assets| 8. Accounts payable|
9. Total current liabilities| 10. Two largest current liabilities| 11. Total liabilities| 12. Net revenues|
13. Net income| 14. Change in net income|
BHI is a conglomerate with headquarters in Omaha, Nebraska. They can actually trace their roots back to a textile company established by Oliver Chase in 1839 (BHI, 2010). In 1962, Warren Buffet started buying stock in BHI, and is now the CEO. By 1985, BHI was no longer a textile operation; it was now solely an insurance company (BHI, 2010). BHI has a Audit Committee Charter that is comprised of at least three directors. All of whom have been determined to have no material relationship to the company, and is otherwise independent, under the rules of the New York Stock Exchange Inc. and rule 10a-3 under the Securities Exchange Act of 1934 (BHI, 2010). BHI is on the New York Stock Exchange and their ticker symbol is BRK.A (BHI, 2010). BHI is ranked the #1 corporate status according to the 11th annual Harris United States quotient. BHI is a company owning subsidiaries engaging in a figure of diverse activities. This company is listed with BRKA and BRKB stock exchange that are known as class A and B shares. “Class B shares are designed never to trade above 1/30th of the price of Class A shares, although they can sell for less than that.” Included as well is the ticker symbol that contains the “Fair Isaac Corporation FICO.” FICO obligation is to transform businesses by making every decision count. Shareholders in BHI approved a 50-1 split of the company’s class B shares. This means the price of the stock will drop about $67 a share. “Berkshire introduced lower prices in Class B the year of 1996 to allow smaller investors to gain entry to the company (Harris, 2010, p. 10).” BHI has gained net worth during 2009 around $21.8 billion. That increased the value of both Class A an Class B stocks by 19.8%. “The business has grown from 16 million in 1967, to 62 billion at the end of 2009, and the float of the company has grown from $2.7 billion to $9.6 billion (BHI, 2010).” With that, they ended the recent annual period with 297,119,000 in assets, 166,017,000 in liabilities, and 97,130,000 in net tangible assets that has increased dramatically over the years. BHI’s stock produced a total return of 76% from years 2000-2010, and they continue to invest successfully. “Berkshire now has a market value of $164 billion, making Buffett's stake worth more than $50 billion (Staff & Wire Reports, 2007).”

BHI is reporting its assets in the Annual Report year end 2009 as $297,119 billion dollars. The report also indicated that the 2008 assets were $267,399 billion dollars; an increase of almost 30 billion dollars over the previous year. Accounts payable totaled $161,334 billion in 2009 and $153,962 billion in 2008. Liabilities from 2008 to 2009 have increased just over $12 billion dollars. The amounts payable for the Insurance sector are $90,241 billion in 2009 and $87,436 billion in 2008. The Utility and Energy sector is virtually unchanged with $25,474 billion in 2009 and $25,328 billion in 2008. Financial products went from $30,656 billion in 2008 to $26,394 billion in 2009.Taxes for 2009 were almost $20 billion, is approximately double in...

References: Berkshire Hathaway Inc., (2010). Berkshire Hathaway Inc. Retrieved on April 18, 2010 from
Business Knowledge Source, (2009)
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