Owner Earnings
Buffett's cash-based replacement for reported profit: net income plus non-cash charges, minus the capital spending needed merely to hold unit volume and competitive position. The maintenance-capex term is unavoidably an estimate, which is the point - a rough measure of the right thing beats a precise measure of the wrong one. It is the number a private owner would actually take home.
5 books · 4 people behind it · 3 resources
Start here
- The Essays of Warren BuffettLawrence A. Cunningham, Warren Buffett, 1997
- Quality of EarningsThornton L. O'glove, 1987
- Creating Shareholder ValueAlfred Rappaport, 1986
The people behind it 4
Each person holds a book in this entry or names it in their own tags.
Investors 1
Academics 2
Journalists 1
Resources 3
- 1986 Chairman's LetterWarren Buffett · essay · Where owner earnings is defined against reported earnings.
- Return on Invested CapitalMichael J. Mauboussin · paper · How returns above the cost of capital are made and lost.
- Everything Is a DCF ModelMichael J. Mauboussin · paper · Every multiple is a discounted-cash-flow claim in disguise.
Books 5
Thornton L. O'glove · 1987