But in general if you take EBlT and you take out the non operating income, you get back to operating profits.

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

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

And so I actually raised prices.

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.

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

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

What's in it for the institution?

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

You sold it 50, you borrowed and sold 50, then when it went down 20 you bought is back, you bought it back for 20

We know how much it takes to build our product.

He was a good another.

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

So what's the profit going to be? So let me write this down.

Kill the goose that lays the golden eggs.

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

And these metrics will tell you that.

But again, fun is not enough.

And we add back the interest, at least in this example, we get to an operating profit number.

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?

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

No pain, no gain.

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.

With trade, there's mutual interdependency and mutual gain between parties.

Minus 500,000.

Then the companies or those factories or whatever you want to think of them,

A looked expensive.

All they care about is profits.

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

So, you're selling costs were embedded here, this was the commission or direct sales costs or whatever you were paying your direct sales people and you made 37 selling directly.

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.

These are the only people who really have, arguably the sophistication and the time and the monetary incentive to really look and scrutinize what management is doing.

Even if it benefited the publishers, it was a creative right and author's right.

But what do you do when the two come into conflict and you're forced to make a decision that either is in Britain's interest, or the interest of Britons, or citizens elsewhere in the world?

When the Golden Cat Corporation got rid of their 10 worst selling cat litter products, they saw an increase in profits by 87 percent a function of both increase in sales and lowering of costs.

This time, good triumphs, and the moon has been returned to its rightful place in the sky.

So what they do is they just take your earnings number and you divide by the number of shares.

They allotted the profits fairly.

MlT actually lived by its actions.

I'll just abbreviate that as Nl.

Go ahead, eat.

But in this case, you literally just take the price of the stock and you divide it by the earnings per share.

So already we have some new nuance on profit.

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