Obtain Berkshire Hathaway’s (Berkshire) Form 10-K for the year ended December 31, 2017, and complete the following requirements. To obtain the Form 10-K, you can use the EDGAR system (see Appendix A at the back of this text for instructions), or it can be found on the company’s corporate website, www.berkshirehathaway.com.

Required

a. Unlike most companies, Berkshire organizes the revenues and expenses on its earnings statements, and the assets and liabilities on its balance sheets, by major business segments. Calculate the return on investment for 2017 for each segment of Berkshire’s business using the margin × turnover method. For segment earnings, use earnings before taxes, which you will have to calculate. Show your computations.

b. Rank the segments’ performance from best to worst, based on their ROIs.

c. Why did the best-performing segment do better than the next best? Was it profitability, the efficiency with which it used its assets, or both?