Because you're getting the same earnings for a lower price.

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

I don't want to think about, are they good at getting low interest?

And you're going to pay a lower Price to Earnings ratio if the company isn't growing.

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

And going back to where we started this video, in terms of capacity utilization and what that might do to prices, this tells us that labor utilization is

Price to Earnings, all else equal and that's a big thing all else equal, the lower the Price to Earnings, you're paying less for something.

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.

But, when you're at a relatively high utilization, it really pays to increase your price hurdle.

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.

So based on that, this looks cheaper.

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

Unconventional natural gas is controversial, as it needs high energy prices to be profitable.

Okay.

Doctor, the patient is desatting.

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

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.

The proletarian infant mortality rate has dropped by 12 per cent.

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.