And when people talk about earnings of a company, this is what they're talking about.

I'll just abbreviate that as Nl.

The taxes will be 153,000.

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

This is 350,000 of net income.

This guy makes what is this?

So EBlT, I kind of view that it goes backwards.

And at least it'll give you a sense of how revenues, gross profit, operating profit, pre tax income and net income really are different.

Before Interest and Taxes.

So you've probably heard not only the term earnings, you've probably also heard the term earnings per share.

Net profit comes to 10 million dollars every year.

This guy makes 21,000.

Yep, that's right.

So that's what I'm paying for, arguably.

Company A made 1 per share. 1 of EPS.

He's not my boyfriend, it's just platonic love with benefits!

And you'll hear these numbers, gross and operating profit and net profit and pretax profit, and it's very hard to understand that these are actually very, very different things, because they all have the word profit, and what does gross and operating and all that mean?

So most cash flow statements, they'll start so I'm going to do a cash flow statement right over here

Minus 500,000.

It's part of business aspect of work and making things you don't have to look at the bottom line on

So then you're having, you have your net income, your net income during the period.

This is what the owners of the company get before they pay the government.

(Laughter) But I know it's the bottom line, or one's perception of it, that motivates people in the end.

And then they'll say well in the most naive interpretation of things, you net income in theory should be the cash you're getting or at least it's some type of profit you're getting assets in the door or at least you're counting as if you're getting some assets in the door.

Let's compare EBlT to operating profit.

And why don't you like them as much?

But here you see it means very, very different things.

And this is what goes to the owners of the company.

In return on equity, the numerator is the net income that we got, so it's 350,000.

This is really important to pay attention to, because so many people say, oh, a company made this much.

Go ahead, eat.

That's an expensive table.

Our interests clash with theirs.

Net profit for the last three months is a new record high!

Because that's not the point of this, but you can apply some tax rate to this and figure out what their net income is.

Kill the goose that lays the golden eggs.

I'm not a charity commissioner.

A benefit to both our worlds.

They buy more of your service and they tell more of their friends, which leads to more profit.

Net profit for the period is estimated at 5 billion yen, largely unchanged from the previous one.

So this is a source of cash, so now the cash from operations 200 net income 400 100

Cores

So that's a nice thing to keep in the back of your mind, this return on asset concept, and it's very closely tied to operating profits and the actual assets of a firm.

And that's what these brands did.

FDlC insured.