Accounting
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Do Profit Margins Really Matter?
“Your margin is my opportunity.” – Jeff Bezos The trouble with the analysis of a single variable is the loss of context. Take profit margins. Higher would seem to be better, right? Not necessarily. Let’s consider the following hypothetical companies....
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Accounting Adventures: The Case of the Missing $166 Million at Berkshire Hathaway
In 2019, Berkshire Hathaway repurchased $5 billion of its own shares. Or did it? There was a difference of $166 million between what the statement of shareholders' equity said the company repurchased and what the statement of cash flows said....
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Accounting is weird: Buffett’s accounting decision on Blue Chip Stamps
When Berkshire Hathaway’s investment in Blue Chip Stamps crossed the 20% mark in 1973 it presented Buffett with a unique accounting decision: which period of earnings to include in Berkshire’s financials. Crossing the 20% ownership mark required Berkshire to report...
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