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

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

Minus 500,000.

The taxes will be 153,000.

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.

I'll just abbreviate that as Nl.

Go ahead, eat.

Our interests clash with theirs.

This is 350,000 of net income.

This was interest. This was non op income.

This guy makes what is this?

And then I was left with 1 million.

Why isn't it on every poster across the third world?

And we had no expenses in that month.

They have no interest expense, because that's not the point of this video.

Are the profits exclusive of taxes?

And this is, I think, a perfect example of what Robert Wright was talking about in those non zero sum things.

Quick example from the corporate world.

Kill the goose that lays the golden eggs.

We had 200 of expenses.

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

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.

Our starting cash here is 50,000. It's our ending cash of the previous period.

When it's rainy and windy, he gives up.

I asked them all.

He was a good another.

Let me write that.

And then if you subtract your costs from your revenue, or if you just add these two numbers, because this one is negative, you have your gross profit.

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 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?

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

Our profit here, if we just take the number that we have here,

This guy makes 21,000.

Company is 10.

Are you using historical earnings?