The interpretation of financial statements Warren Buffett PDF is outlined in his annual letter to investors which he releases at the beginning of every fiscal year, usually around springtime after all the dust has settled from the previous year. Part of interpreting the financial statements of Warren Buffett and Berkshire Hathaway is looking at the companies that he owns. He and Charlie Munger have created a company which owns very popular American companies such as Apple, General Motors, Southwest Airlines, Wells Fargo, Goldman Sachs, Moody’s, Phillips 66, and Bank of America. Looking at all of these companies, Warren Buffett and Berkshire Hathaway usually do not own half or whole companies. Usually the percentages under a quarter, under 25%.
The next part in interpreting financial statements of Warren Buffett in his PDF each year is understanding the percentage gain of the year relative to the other years in which Berkshire Hathaway has been in operation. Overall, the average over the past sixty years for Berkshire has been about nineteen. This has steadily outperformed the overall market of the S&P 500 or Dow Jones. Year-over-year when you combined the gains that Berkshire Hathaway has made each year, which sometimes you reach up to 40% or 50% gains, be combined overall percentage game when compounded to date is over 1 million percent.
The last part of understanding how to interpret the financial statements of the Warren Buffett PDF is understanding how any tax code changes would affect profits, and also the principle of realized gains vs unrealized gains. For example, realized gains of 60 billion dollars for the year 2017 at Berkshire Hathaway or partly attributed to the changes in US tax code that occurred when Donald Trump was elected president.