Warren Buffett：Berkshire 1987 Letter, Excerpt 3

By itself, this figure says nothing about economic performance. To evaluate that, we must know how much total capital - debt and equity - was needed to produce these earnings. Debt plays an insignificant role at our seven units: Their net interest expense in 1987 was only $2 million. Thus, pre-tax earnings on the equity capital employed by these businesses amounted to $178 million. And this equity - again on an historical-cost basis - was only $175 million.

Source： https://www.berkshirehathaway.com/letters/1987.html
Locator：1987 Chairman's Letter, excerpt 3 · Verified：2026-10-19 · Verification：Short excerpt

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