Owner earnings

Warren Buffett's formulation: reported earnings plus depreciation and other non-cash charges, less the capital spending and working capital genuinely needed to maintain competitive position.

A company earning ₹615 crore with ₹380 crore of depreciation, ₹300 crore of maintenance capital spending and ₹60 crore of working capital growth produces ₹635 crore of owner earnings.

The measure sits between accounting profit, which charges an arbitrary depreciation figure, and free cash flow, which subtracts growth spending the owner could choose not to make.

Its weakness is that maintenance capital expenditure is an estimate. Its strength is that making the estimate forces the right question.