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

And now we're ready to figure out how much money did the operations of this business make?

They're going to make 0.35 in 2009 as well.

Kill the goose that lays the golden eggs.

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

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.

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.

Our interests clash with theirs.

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.

So then you're having, you have your net income, your net income during the period.

So this is trailing 12 months.

A benefit to both our worlds.

And if we see how they graphed things here, on the vertical axis, what we normally associate with the y axis, they graphed Abby's earnings.

I'll just abbreviate that as Nl.

Go ahead, eat.

So, that's one general conclusion about why societies make bad decisions conflicts of interest.

And that's my dad found that.

He was a good another.

And that's what these brands did.

FDlC insured.

The rewards would be... enormous.

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

Fair enough.

All they care about is profits.

This paint can right here saved the Dutch Boy paint company, making them a fortune.

I do want to leave you with one positive thought.

So this is trailing 12 months earnings.

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

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

No gains without pains.

I wouldn't give up, I would just be going back and looking at the customer segments you are targeting and understand whether you want to build the business or have a hobby.

There are also real business benefits.

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.

Why make this thing?

All the profits go toward Phillip's hospital bills.

You could also have forward earnings.

We know how much it takes to build our product.

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?

The taxes will be 153,000.

I'm not a charity commissioner.

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