Berkshire Hathaway Inc. (BRK-B): Earnings, Cash Flow and Balance Sheet Review

Income‑statement trends (FY2021–FY2024)#

Berkshire Hathaway’s consolidated income statement for fiscal 2024 records revenue of $371.43B, up +1.91% versus 2023’s $364.48B, a modest top‑line acceleration after the prior years’ stronger gains. Gross profit expanded to $86.58B in 2024 from $70.95B in 2023, a +22.02% increase that lifted the gross margin to 23.31%. Operating income moved materially higher, rising to $59.44B in 2024 from $48.12B in 2023, representing a +23.53% jump and an operating margin that climbed to 16.00% from 13.20% a year earlier.

Despite stronger operating performance, reported net income declined to $89.00B in 2024 from $96.22B in 2023, a change of -7.50%. The key accounting signal here is the divergence between improving operating income and falling net income: operating earnings rose by +23.53% while pre‑tax non‑operating contributions declined materially. Income before tax fell from $120.17B in 2023 to $110.38B in 2024, meaning the non‑operating/other component (income before tax minus operating income) dropped from $72.05B to $50.94B, a -29.29% fall. That pattern underlines that year‑to‑year net income volatility at Berkshire is heavily influenced by non‑operating items rather than core operating margin swings.

Put differently, Berkshire’s ongoing businesses strengthened in 2024: gross margin expansion and a sizeable lift in operating income both point to better operating economics across the consolidated footprint. However, the headline net income remains susceptible to swings in investment and other non‑operating results; 2022 is the clearest illustration, when net income swung negative (-$22.76B) despite positive operating income of $41.59B. The accounting decomposition shows Berkshire’s earnings profile is a two‑part story: a relatively steady, improving operating engine and a volatile non‑operating component that dominates headline earnings moves.

Cash‑flow quality and free‑cash‑flow dynamics#

Fiscal 2024 shows a clear deterioration in cash‑flow conversion. Net cash provided by operating activities fell from $49.20B in 2023 to $30.59B in 2024, a -37.82% change. When compared to net income, operating cash flow covered only 34.15% of reported net income in 2024 (30.59 / 89.56), down from 50.65% in 2023. That drop indicates weaker cash conversion of accounting earnings in 2024 and raises questions about the underlying timing of receivables, payables, non‑cash items, or realized investment gains that previously supported cash flow.

Free cash flow (FCF) illustrates the change starkly: FCF fell to $11.62B in 2024 from $29.79B in 2023, a -61.00% decline driven primarily by lower operating cash and roughly flat capital expenditure. Capital expenditures were $18.98B in 2024, largely consistent with 2023 capex of $19.41B, so the FCF collapse is not a result of rising capex but of weaker operating cash flow.

Depreciation and amortization remained a meaningful non‑cash addback (2024 D&A of $12.86B), and change in working capital was a negative -$6.78B in 2024 versus a positive $20.44B in 2023 — an important driver of the operating cash movement. The swing in working capital from a source to a use of cash explains a substantial portion of the CFO decline. Acquisitions and investing cash flows were modest in 2024 (acquisitions net -$0.396B) compared with prior years, and share repurchases slowed sharply to -$2.92B from -$9.17B in 2023.

In short, the 2024 cash‑flow picture is one of healthy but lower cash generation from operations, steady capex, and markedly lower buybacks and acquisitions. The combination produced a material rise in short‑term liquidity (discussed below) but weaker free cash generation for discretionary deployment.

Balance‑sheet changes and liquidity posture#

Berkshire’s balance sheet expanded to $1,153.88B total assets in 2024 from $1,069.98B in 2023 (++7.86%). The most notable reallocation is the surge in short‑term liquidity: cash and short‑term investments rose to $334.20B in 2024 from $167.64B in 2023, an increase of +99.33% or +$166.56B. This jump drove total current assets from $267.74B to $434.40B, lifting the current ratio from 4.70x in 2023 to 5.94x in 2024 — on its face a very conservative liquidity posture.

At the same time, total non‑current assets decreased from $802.24B to $719.48B (a -10.33% change, -$82.76B). The mirror movement — large increase in current assets and drop in non‑current assets — is consistent with reclassification or repositioning of marketable securities from non‑current to current holdings, or substantial realizations and redeployment into short‑term investments. The balance‑sheet structure therefore shifted toward shorter‑dated liquid assets while overall leverage remained modest.

Total stockholders’ equity climbed to $649.37B in 2024 from $561.27B in 2023, a +15.70% increase. Retained earnings rose +$88.87B (from $607.35B to $696.22B), essentially reflecting the full addition of net income to equity after adjustments. Total liabilities edged up only slightly to $502.23B from $499.21B (++0.61%), and total debt moved to $143.53B from $133.57B (++7.43%). Notably, long‑term debt decreased to $119.90B from $126.81B, implying that the increase in total debt is concentrated in current or short‑term borrowings and other current liabilities rather than an expansion of long‑dated leverage.

Net debt — total debt less cash & short‑term investments — remained essentially flat at $95.80B (2024) versus $95.55B (2023). That stability, combined with the large increase in short‑term investments, shows Berkshire moved a portion of capital into liquid, interest‑bearing instruments without materially changing net indebtedness.

Key ratios — independent calculations#

Calculated from the fiscal figures, the ratio set below highlights the company’s conservative leverage, improving operating profitability, and weaker cash conversion in 2024. Trailing PE using the quoted price of $479.22 and EPS of $29.18 yields 16.42x (479.22 / 29.18). Market capitalization of $1,033.35B divided by reported equity $649.37B produces a price‑to‑book of 1.59x. Price‑to‑sales is 2.78x (1,033.35 / 371.43).

Leverage and capital structure metrics are similarly conservative: debt to equity is 22.11% (143.53 / 649.37), debt to assets 12.44% (143.53 / 1,153.88), and equity to assets 56.29% (649.37 / 1,153.88). Net‑debt‑to‑EBITDA using reported net debt 95.80B and FY EBITDA 128.43B is 0.75x (95.80 / 128.43), indicating low net leverage relative to operating cash‑flow proxies.

Enterprise‑value multiples are sensitive to the definition of cash included. Using market cap $1,033.35B, total debt $143.53B, and subtracting cash & short‑term investments $334.20B gives EV of $842.68B and an EV/EBITDA of 6.56x (842.68 / 128.43). If one instead subtracts only cash & cash equivalents ($47.73B) the EV rises to $1,129.15B, producing EV/EBITDA of 8.79x. The range (roughly 6.6x–8.8x) is materially lower than some published EV/EBITDA figures reported elsewhere for TTM metrics, which suggests methodological differences (cash inclusion, timing, or EBITDA definition) explain reported discrepancies.

Other computed ratios of note: 2024 EBITDA margin 34.58%, operating margin 16.00%, net margin 23.96%, ROE (net income divided by average equity 2023–2024) +14.71%, and ROA (net income divided by average assets 2023–2024) +8.01%. The current ratio is 5.94x for 2024, reflecting ample near‑term liquidity.

What the numbers reveal (facts, not narrative)#

The fiscal 2024 accounts reveal three fundamental facts. First, Berkshire’s operating businesses strengthened in 2024: gross profit, operating income and operating margin all rose materially, signaling improved core performance across the consolidated portfolio. Second, earnings remain volatile because of non‑operating items: the decline in pre‑tax non‑operating contributions from $72.05B to $50.94B drove the headline net income move despite stronger operating income, underlining that net income swings are dominated by investment and other non‑operating results. Third, liquidity posture shifted sharply toward short‑term instruments: cash and short‑term investments nearly doubled to $334.20B, raising the current ratio to 5.94x while net debt stayed flat, indicating a deliberate repositioning into liquid assets without materially increasing net leverage.

A few additional concrete insights follow from the data. Free cash flow plunged -61.00% because operating cash declined (working capital swing was an important driver), not because of higher capex. Buybacks slowed markedly (repurchases down -68.12% from 2023), and acquisitions were minimal in 2024. The company therefore generated less discretionary cash and retained a much larger short‑term investment balance instead of deploying it into share repurchases or M&A in that year.

Finally, on leverage and solvency the facts are unambiguous: Berkshire carries low net leverage by common measures (net‑debt/EBITDA 0.75x) and a conservative capital structure (debt/equity 22.11%), leaving substantial room to absorb shocks or redeploy capital as management decides. However, headline earnings and book‑value outcomes will remain sensitive to investment results beyond operating performance.

Key takeaways#

Berkshire’s FY2024 shows stronger operating economics but weaker cash conversion and large repositioning into short‑term liquid investments. Operating income rose +23.53%, while net income fell -7.50% because non‑operating gains were smaller in 2024 versus 2023. Free cash flow contraction (-61.00%) was driven by lower operating cash flow and a working‑capital swing, not higher capex. Liquidity surged, with cash & short‑term investments at $334.20B, and net leverage remained low (net‑debt/EBITDA 0.75x). Share repurchases and acquisitions slowed, reflecting either strategic caution or fewer attractive deployment opportunities in 2024.

Quick answer (featured snippet: 40–60 words)#

Fiscal 2024: Berkshire’s operating performance improved (operating income +23.53%) but headline net income fell -7.50% because non‑operating gains shrank. Free cash flow collapsed -61.00% as operating cash fell, while cash and short‑term investments nearly doubled to $334.20B, leaving the firm conservatively positioned with low net leverage.

Conclusion — measured, data‑based perspective#

The raw numbers position Berkshire Hathaway as a company whose core businesses produced stronger operating results in FY2024 while headline earnings remained volatile because of investment‑related swings. The balance sheet moved decisively toward liquidity, with $334.20B in cash and short‑term investments and a high current ratio of 5.94x, even as net‑debt levels held steady. Free cash flow weakness is the principal operational red flag in 2024 and was driven by weaker operating cash flow rather than rising capital expenditures.

Taken strictly on the presented financials, the company exhibits a conservative capital structure, improved operating margins, but elevated earnings volatility tied to non‑operating results and a meaningful decline in cash conversion. Those are the facts the numbers reveal; any further interpretation about strategic intent or future moves would require additional information beyond the fiscal statements provided here.

(Analysis based exclusively on the fiscal figures included in the supplied dataset for FY2021–FY2024.)