Berkshire Hathaway (BRK-A) receives Old York Operational Quality (AA) Rating for fiscal year 2025
(AA) | Conglomerate | Diversified Financial / Insurance / Industrial
By: Old York Financial
A Private Principal Research Report
the verdict
Old York Financial has assigned Berkshire Hathaway (BRK-A) an Operational Quality (AA) Rating. Berkshire is the world’s most powerful "Quality Aggregator." In 2025, the firm proved the resilience of its diversified model, generating a record $48.5 Billion in Operating Earnings. While Berkshire holds Sovereign-tier assets (GEICO, BNSF, Apple stake), it receives a (AA) rather than a AAA due to its deliberate "Cash Drag." With over $350 Billion in cash sitting in low-yield Treasuries as of late 2025, the consolidated ROIC is mathematically held back by the weight of its own fortress.
the old york analysis
owner earnings: the normalized surplus We ignore the "paper gains/losses" of the $300B+ equity portfolio and focus on the cash-generating power of the controlled businesses (Insurance, Rail, Energy).
2025 Reported Operating Earnings: $48.5 Billion
(+) Depreciation & Amortization: ~$13.2 Billion
(–) Maintenance CapEx: (~$16.5 Billion)
= OLD YORK OWNER EARNINGS: $45.2 Billion
Analyst Note: Berkshire is a "Deferred Tax" machine. By holding winners like Apple and Coca-Cola for decades, it utilizes an interest-free loan from the government (deferred taxes) to fund its "Owner Earnings" engine. This is the highest form of Principal stewardship.
growth & market dominance
Annual Revenue (2025): ~$380 Billion.
Operating Margin: 20.5% (TTM).
Insurance Float: $174 Billion (Up $2B from 2024).
Analyst Note: The "Float" is Berkshire’s secret weapon. It is $174 Billion of "Other People's Money" that costs Berkshire less than zero to hold, which they then invest for their own benefit. This is the ultimate financial monopoly.
operational efficiency
ROIC (Return on Invested Capital): 6.54% (Blended) / 12.3% (Operating Segments).
Old York Standard: A true (AAA) requires >15%.
Analyst Note: The consolidated ROIC is distorted by the $358 Billion cash pile. If you strip out the cash and look only at the operating businesses (BNSF, GEICO, See’s Candies), the quality is Sovereign. However, as a consolidated entity, the "Cash Drag" is a choice that prioritizes Survival over Efficiency.
the fortress check
Pricing Power: VARIED. GEICO and BNSF have near-absolute pricing power in their respective domains. However, its manufacturing and retail wings (Fruit of the Loom, NetJets) operate in more competitive environments.
The "Cash Moat": UNMATCHED. Berkshire is the "Lender of Last Resort." In a market crash, while every other company is starving for liquidity, Berkshire’s $350B+ cash pile allows it to buy "Gold" at "Lead" prices. This is Antifragility in its purest form.
Solvency: SOVEREIGN. Debt to Equity stands at 0.18x. The company is essentially "Un-leveraged" when compared to any other diversified financial institution.
final determination
Rating: Old York Quality (AA)
Classification: The Antifragile Quality Aggregator. Berkshire Hathaway is the safest business in the Registry. It receives a (AA) because its sheer size and cash-heavy strategy make it mathematically difficult to produce the high-velocity ROIC seen in capital-light monopolies like CME Group or Mastercard. For an investor, it is not a "growth play," but the ultimate "Capital Preservation" vehicle. It is the "Anchor" of a Quality Portfolio.
Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager. This report is for informational purposes only.
