“The primary test of managerial economic performance is the achievement of a high earnings rate on equity capital employed”

—  Warren Buffett

1979 Chairman's Letter http://www.berkshirehathaway.com/letters/1979.html
Letters to Shareholders (1957 - 2012)
Context: The primary test of managerial economic performance is the achievement of a high earnings rate on equity capital employed (without undue leverage, accounting gimmickry, etc.) and not the achievement of consistent gains in earnings per share. In our view, many businesses would be better understood by their shareholder owners, as well as by the general public, if managements and financial analysts modified the primary emphasis they place upon earnings per share, and upon yearly changes in that figure.

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Warren Buffett 146
American business magnate, investor, and philanthropist 1930

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