BerkshireHathaway2009 assignment

BerkshireHathaway2009 assignment - MGMT 1A, Winter 2011...

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MGMT 1A, Winter 2011 Prof. Julie Ann Gardner-Treloar To complete the assignment, you need to refer to the Berkshire Hathaway financial statements for calendar year 2009 (for the year ended December 31, 2009). This assignment must be typed directly onto this document . You will need to access the information in two different locations: 1. Berkshire Hathaway’s web site 2. The SEC’s web site (www.sec.gov) You must work on this assignment by yourself. IT IS NOT A GROUP PROJECT. Any students working together will receive zero on the assignment. Do not plagiarize. Use your own words . Every answer needs to be paraphrased or placed in quotations. Quotations should be limited. In answering the questions below, provide all dollar amounts in millions to be consistent with the financial statements. When computing percentages, carry all answers out to two decimal places (i.e., 12.34%). The following information can be obtained from Google and the Annual Report at the company’s web site. I. Refer to Google 1. Who is Warren Buffet? i. Warren Buffett is an American man who is known as the worlds most successful investor. He is the main shareholder and CEO of Berkshire Hathaway. Is also a philanthrdsopist as he pledged to give away 99% of what he makes. Is consistently either the wealthiest man in the world or among the wealthiest. 3. Where is Warren Buffet on the Forbes “ The 400 Richest Americans” list, and what is the source of his wealth? a. 2 nd . His source of wealth is Berkshire Hathaway. II. Refer to the Berkshire Hathaway Chairman’s Letter in the Annual Report 4. How much did the net worth and per-share book value of both Class A and Class B stock change in 2009? a. The net worth increased by $21.8 billion. Class A and Class B stock increased per share book value by 19.8%. 4. What is book value growth from 1964 to 2009? a. Book value growth has increased from $19 in 1964 to $84,487 in 2009. An increase of 20.3% compounded annually. 5. Book Value at most companies understates what? 1
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a. Intrinsic value. 6. Berkshire has never had any five-year period during which the gain in book value did not exceed what? a. The S&P 500s gain. Berkshire Hathaway always exceeded it. 7. What did Berkshire supply in September 2008? How much did Berkshire provide? a. Liquidity. $15.5 Billion. 8. What makes Warren and Charlie sleep well? a. The $20 billion-plus of cash-assets. 9. How do Warren and Charlie let the subsidiaries operate? Why? a. They don’t monitor them at all. Because this allows for a sense of ownership that keeps the company moving quickly. They can afford a few mistakes compared to the slower rate of progress that would have been made if everything was to be run by Warren and Charlie before a decision was made. 10. To what management decisions do Warren and Charlie limit themselves?
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BerkshireHathaway2009 assignment - MGMT 1A, Winter 2011...

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