Owner Earnings
Warren Buffett's measure of the real cash an owner can take out of a business each year.
What it is
Owner earnings is a cash-based measure of profit defined by Warren Buffett: reported net income, plus non-cash charges like depreciation, minus the capital spending the business genuinely needs to maintain its competitive position. It tries to capture the cash a business actually throws off to its owner, rather than accounting profit. It is conceptually close to free cash flow but emphasizes maintenance capital spending.
Why it matters
Reported earnings can be distorted by non-cash items and aggressive accounting, while owner earnings focuses on durable, distributable cash. Using it as the basis for valuation guards against paying for profits that never become real cash.
How it's calculated
Start with net income, add back depreciation, amortization, and other non-cash charges, then subtract the maintenance portion of capital expenditures (and adjust for working-capital needs). The maintenance-capex figure is a judgment call, which is the measure's main source of imprecision.
How Quintarthai uses it
The income-statement and cash-flow detail needed to build owner earnings — net income, D&A, and capital spending — is on each company's Financials tab.