So as you see here, if I charge 2.80 and I only sell 300,000, then this is my return on asset right here.

Let's say this is what we assume is how many cupcakes we sell.

This is just the money directly from the cupcakes.

And we'll make it more complicated in the future

I put my software and IBM together

Simply put, we hate losing what we've got.

I'm going to prevent a huge amount of damage that he could cause.

So this kind of the cash income statement,

Let's see if we can use our example to understand the 3 types of income statements and hopefully understanding those income statements will also help us understand this example.

So my return on asset is 7 .

let's kind of do it backwards.

So it will benefit, because you are discounting some of the cash payments.

No. I want a period on this sentence.

So this right here you could view as our income statement.

How much am I making from operating the business?

And I won't go into all of the details of an income statement, but any income statement you look at will have this operating profit line.

Or 3 is you could have found a business model but may be one that isn't an explosive growth, but you could be growing slowly and barely breaking even.

One of the interesting thing about costs is that in the old days costs and revenue, the minute you started your company, your investors said oh, we know how to track all this.

People tend to place a much higher value on losses than on gains.

Liquidate. Abrogate. Quell.

And then in month 4 we actually earned the revenue.

If I sell 1.60 per cupcake and if I sell 900,000, then I'm also at break even.

And I'll write the common acronym in there, COGS.

Mutilate.

There's just some people who like my cupcakes.

And my cupcakes, I only started selling 250,000 of them and then my return on asset essentially went to zero.

Damage report!

Give a better indication of what's actually going on in the buisness, and the way I did it in the first two videos, the first column over here

But what you really need to be doing is working with your investors and your management team is to derive the metrics that matter.

And when there is mutual gain, both sides stand to lose more than they would gain if they started a war.

Nantucket itself, said Mr. Webster, is a very striking and peculiar portion of the

Profitable.

So hopefully this gives you a idea of why accrual gives a better picture of what's happening in a buisness.

No damage.

No damage.

Damage report.

Damage report!

Then this 10,000 thousand will become lower.

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

Beneficiary

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.

Haste is waste.

You'll be out 1850, you would have gotten on the car.

We're losing hull plating.

It's called ChronoImpairment.