And I think you already get the sense that the lower the

But when you lower the Price to Earnings you are increasing the Earnings to Price.

Memory Booster Technology

The most rapidly growing city in the country.

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.

This is a pretty profitable business, more profitable than most.

Anyway, I want to leave you there.

Minus 500,000.

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.

Interest rate

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

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

So let me switch colors just to ease the monotony.

I'll just abbreviate that as Nl.

Go ahead, eat.

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

Coupon rate

Market interest rate

Our interests clash with theirs.

Nominal interest rate

Kill the goose that lays the golden eggs.

The taxes will be 153,000.

I'm not a charity commissioner.

A benefit to both our worlds.

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

Are you with me?

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

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

It's just a faster way of saying

Don't look at me, it's Boost sir.

So that's a little bit of a taste of why someone might realistically, in this case, pay a higher Price to Earnings for safety.

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.

And that's my dad found that.

The rewards would be... enormous.

And let's say, assume if I inherited this million dollars, I didn't finance it.

looks neutral.

Maybe it goes to 2 in 2010.

Price to Earnings is 1.75 divided by 0.35, would now be a 5 Price to Earnings.

Before Interest and Taxes.

The reason this is happening boils down, in my mind, to one basic problem, which is our inability to perceive the difference between public benefits and private profits.

This is 350,000 of net income.

This was interest. This was non op income.