Warren Buffet and Berkshire Hathaway Performance from 1995 to 2020- Warren Buffett has become the leader of this holding company since the 1960s’. Berkshire Hathaway has a long history and journey in the textile industry that was established by Oliver Chace in 1839. After some mergers with other textile, they experienced the golden and doom era of the textile industry. Until Warren Buffett takes the control of this company and diversified its business.
Historically, he bought the shares from the former stakeholder, namely Seabury Stanton. In the beginning, Berkshire Hathaway was a textile company, but it does not run well. In 1985, Warren Buffett shut down the core business of Berkshire Hathaway. Although he closed the textile business of Berkshire Hathaway, this company has enormous subsidiaries in multiple industries. Warren Buffett acknowledges that investing in Berkshire Hathaway was one of the worst mistakes, but he uses Berkshire Hathaway to conquer the world and shows his ability in investing skills. Along with Charlie Munger as Vice Chairman in Berkshire Hathaway, he still runs Berkshire Hathaway with a modest life and simplicity.
Warren Buffett and Berkshire Hathaway Performance
Warren Edward Buffett, commonly known as Warren Buffett or the oracle of Omaha, is the billionaire that was born in Omaha, on August 30th, 1930. He was the student of Benjamin Graham, the father of value investing, at Columbia University. Benjamin Graham, as we know, is popular with the formula of valuing the stock, and he is the author of some popular investment books, namely “The Intelligent Investor“, “Security Analysis”, and “The Interpretation of The Financial Statements“. Moreover, Warren Buffett also is influenced by Phillip Fisher, the stock investor and the author of Common Stock and Uncommon Profits.
Nowadays, the company has diverse subsidiaries from Berkshire Hathaway Direct Insurance Company, Berkshire Hathaway Energy Company, Berkshire Hathaway GUARD Insurance Companies, Berkshire Hathaway Home state Companies, and Berkshire Hathaway Specialty Insurance. Moreover, this company still has some shares in some reputable companies. These companies are Coca-Cola, Apple Computer, Kraft Heinz, Bank of America, Verizon Communications, Chevron, General Motors, American Express, BYD, and others.
The Financial Structure of Assets and Liabilities of Berkshire Hathaway from 1995 to 2020
|Berkshire Hathaway Financial Structure|
|In US. Dollar||In US. Dollar||In US. Dollar|
|1995||29.9 Billion||12.7 Billion||17.2 billion
|1996||43 Billion||20 Billion||23 billion
|1997||56.1 Billion||24.7 Billion||31.4 billion
|1998||122 Billion||64.8 Billion||57.2 billion
|1999||131.4 Billion||73.7 Billion||57.7 billion
|2000||135.7 Billion||74 Billion||61.7 billion
|2001||162.7 Billion||104.8 Billion||57.9 billion
|2002||169.5 Billion||105.5 Billion||64 billion
|2003||180.5 Billion||103 Billion||77.5 billion
|2004||188.8 Billion||102.9 Billion||85.9 billion
|2005||198.3 Billion||106.9 Billion||91.4 billion
|2006||248.4 Billion||140 Billion||108.4 billion
|2007||273.1 Billion||152.4 Billion||120.7 billion
|2008||267.3 Billion||153.8 Billion||113.5 billion
|2009||197 Billion||161 Billion||136 billion
|2010||372.2 Billion||209.2 Billion||163 billion
|2011||392.6 Billion||223.6 Billion||169 billion
|2012||427.4 Billion||235.8 Billion||191.6 billion
|2013||484.9 Billion||260.4 Billion||224.5 billion
|2014||526.1 Billion||283.1 Billion||243 billion
|2015||552.2 Billion||293.6 Billion||258.6 billion
|2016||620.8 Billion||334.4 Billion||286.4 billion
|2017||702 Billion||350.1 Billion||351.9 billion
|2018||707.7 Billion||355.2 Billion||352.5 billion
|2019||817.7 Billion||389.1 Billion||428.6 billion
|2020||873.7 Billion||422.3 Billion||451.4 billion
|Source : Berkshire Hathaway Annual Report 1995-2020|
From 1995 to 2020, under the guidance of Warren Buffet, Berkshire Hathaway has experienced of some fluctuation performance, but it is on the right track. The data was obtained from Berkshire Hathaway’s annual report from 1995 to 2020. We collected the data and analyzed the data from the Balance Sheets and Income statements of Berkshire each year.
With the development of Berkshire Hathaway under the Warren Buffet leadership, this company has experienced some fluctuation era but instilled stable conditions. The ratio of assets/ liabilities is between 1.22 and 2.35. the lowest ratio of assets/liabilities happened in 2009 and the highest ratio in 1995. The Assets of Berkshire Hathaway grew consistently from 1995 to 2020. In 1995, the growth of assets is just 29.9 billion US. Dollar and it becomes 873 billion US. Dollar in 2020. It increases by twenty times.
The Financial Performance of Revenue and Net Income of Berkshire Hathaway from 1995 to 2020
|Berkshire Hathaway Performance in 2020|
|In US. Dollar||In US. Dollar|
|1995||4.4 Billion||611 million|
|1996||10.5 Billion||2.4 Billion|
|1997||10.4 Billion||1.9 Billion|
|1998||13.8 Billion||2.8 Billion|
|1999||24 Billion||1.5 Billion|
|2000||33.9 Billion||3.3 Billion|
|2001||37.6 Billion||521 million|
|2002||42.3 Billion||4.2 Billion|
|2003||63.8 Billion||8.1 Billion|
|2004||74.3 Billion||7.3 Billion|
|2005||81.6 Billion||8.5 Billion|
|2006||98.5 Billion||11 Billion|
|2007||118.2 Billion||13.2 Billion|
|2008||107.7 Billion||4.9 Billion|
|2009||112.4 Billion||8 Billion|
|2010||136.1 Billion||12.9 Billion|
|2011||143.6 Billion||10.2 Billion|
|2012||162.4 Billion||14.8 Billion|
|2013||153.3 Billion||19.47 Billion|
|2014||194.6 Billion||19.8 Billion|
|2015||210.9 Billion||24 Billion|
|2016||223.6 Billion||24 Billion|
|2017||239.9 Billion||44.9 Billion|
|2018||247.8 Billion||4 Billion|
|2019||254.6 Billion||81.4 Billion|
|2020||245.5 Billion||42.5 Billion|
|Source : Berkshire Hathaway Annual Report From 1995-2020|
In the performance aspects of Berkshire Hathaway from 1995 to 2020, Berkshire Hathaway still have consistent in generating profit / net income without any losses. The highest profit / net income of Berkshire Hathaway occurs in 2019 and the lowest net income was in 2001. Along with the assets, the net income of Berkshire Hathaway increased from 611 million US. Dollar in 1995 and becomes 42.5 billion US. Dollar.
Based on some financial ratios, Berkshire Hathaway showed a consistent Debt Equity Ratio (DER) and Debt to Assets Ratio (DAR). The average Debt to Equities ratio showed an average of 1.18 from 1995 to 2021. This means that 1 US Dollar of equities is equivalent to 1.18 of liabilities. Meanwhile, in the Debt to Assets ratio, the average of Berkshire Hathaway’s DAR average value is around 0.54. It means that 1 US Dollars of Assets is equivalent to 0.54 Dollars in Liabilities. Basically, the value of DER and DAR can be better if the value can go down from time to time.
With this incredible performance in more than 2 decades, Berkshire Hathaway has become one of the biggest companies in the world with a billion of assets and profits. Berkshire Hathaway’s performance is the reflection of Warren Buffett’s managerial, vision, and skills that manage the company and its subsidiaries.
Bibliography of Warren Buffett and Berkshire Hathaway Performance from 1995 to 2020
Berkshire Hathaway. 2020. Annual Report 1995-2020. Accessed via https://www.berkshirehathaway.com/reports.html on February 18th, 2022.