Warren Buffett says that rather than only looking at earnings, one most also look at the capital reinvested in the business to generate incremental earnings. Thus, i want to know that how can i calculate, what percentage/ amount of retained earnings was actually invested to increase operational revenue vs how was much was left as cash for use in future ? Eg: If retained earnings is $100, did the firm use $20 / $40 etc as capital reinvestment in business to increase operational revenue ? How can we calculate the same?
