So this is trailing 12 months.

Sometimes we're profitable. Sometimes we're not.

Profitable.

Maybe Abby made 50 and Ben earned 0.

It looks like our profit is jumping all over the place.

The company's profitability improved.

And we add back the interest, at least in this example, we get to an operating profit number.

It's time to monetise the thing.

If it's growing 100 a year for 20 years, this is actually a very good deal.

Where they start to diverge is below that line.

So a plus b have to be equal to 50.

We are assuming a very simple world, were the is no taxes, we have no debt, we have no intrest or things

These are key metrics.

So let's look at them over the course of one year.

So notice.

Invest financial assistance, but also management assistance.

But I just want to give you the gist of what's happening.

And we can eyeball it right here.

Because when someone says earnings, are those the earnings last year?

But just so you know what EBlT is, EBlT is just Earnings

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

The reason why you are willing to pay a higher Price to

And what's left over for the equity?

So let me switch colors just to ease the monotony.

And they were male and female 18 30 and they were casual fans.

When? I said it's time to monetise the site.

So something very interesting is happening.

So let me write this down.

The earnings I just said, this is actually what happened to the company.

Everything on this line would be a valid combination of

So now we add an interesting line.

And the first one is that this whole idea about revenue stream, Steve, I get it.

So now we switched places.

Once you add it all up, though, and with Keller, the revenues are almost 10 less than was actually received.

Abby earned 10 more than Ben.

And that's because they have the same exact asset.

Let's compare EBlT to operating profit.

And why don't you like them as much?

So the price would be 100.

Another type of revenue model is licensing.

You go to some VC who specializes in kind of helping people get to that profitability stage.

We talked about the potential ways to charge

And how they were going to create demand was through search ads, social media, stadium promotions.

The return on the investment will be high.

You're making 10 , and that's just to connect the dots.