Corporate Finance Question
DOES WARREN BUFFET BORROW MONEY TO FINANCE ACQUISITIONS?
Is Berkshire Hathaway's growth financed only by in-company funds or it raises capital as well to expand business and to acquire more companies? In other words, how leveraged is Berkshire Hathaway?
Asked by GUMNAAM in
Corporate Finance
4 months ago
Answers
593 points
RobSmith answered 4 months ago …
Just look at the company's balance sheet to find out. You'll see that the company's debt has gone up dramatically but that is due to acquiring a couple of companies that had a lot of debt on their balance sheets (e.g. MidAmerican). Berkshire will only do this if it feels it can easily pay down the debt.
You'll also notice the company has over $44 billion in cash on its books.
So short answer: No, Buffett doesn't use debt financing to acquire companies.
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