... businesses is clearly beyond the scope of this paper, but we can begin to get an idea by focusing on the firm's two main strengths: insurance and investments. Buffett transformed the ailing textile firm into the perfect vehicle for his investing genius. Cash pours into the firm from its primary insurance and reinsurance units' premiums. Since there is usually a time lag, often measured in years, between the premiums coming in and the claims being paid out, Buffett can use this cash, called "float" in insurance terminology, to buy either undervalued securities or entire businesses. We will begin by looking at some of Berkshire's ratios from the consolidated level. Then, we will look at the firm's insurance subsidiaries and disaggregate their data in order to assess their performance relative to the conglomerates. Finally, we will look at Buffett's philosophy of value investing, which depends on accounting and financial statement analysis much ...

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