Letters by Topic
Letters on Cash is King
Cash flow, not accounting earnings, determines a business's ability to create value over time.
1987·Discussion of the difference between accounting earnings and cash flow
Free cash flow—the money available for distribution or reinvestment—is the true measure of a business's value-creating ability.
2002·Explaining Berkshire's cash position during the pre-crash period
We hold a substantial portion of Berkshire's assets in cash and Treasury bills that generate modest but safe returns.
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