Now we can do another notion, and that's return on equity.

He's trying to do some good.

Because in the last video I talked a little bit about return on asset, where we just took the operating profit, and we divide that by the assets.

And so we took this number as the numerator and we divided by the number of assets.

I want more time

And I think this is an interesting thing.

The denominator is the assets, 10 million.

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

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.

Our deal is contingent upon the retrieval of Scylla.

Our interests clash with theirs.

Minus 500,000.

So the for profit sector can pay people profits in order to attract their capital for their new ideas, but you can't pay profits in a nonprofit sector, so the for profit sector has a lock on the multi trillion dollar capital markets, and the nonprofit sector is starved for growth and risk and idea capital.

Welcome to Zomcon's returns department.

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.

Kill the goose that lays the golden eggs.

For a 10 million investment, we're getting 1 million a year.

I'm not doing anything.

Honor the treaties.

A benefit to both our worlds.

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.

And that's my dad found that.

35 500 is the same thing is 7 100, so it equals 7 return on equity.

This line would have disappeared.

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.

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

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

All I care is the assets that they have, how good are they at putting those assets to work?

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.

The taxes will be 153,000.

I'm not a charity commissioner.

You'll be a member of a democratically controlled investment opportunity who's primary role, after return to investors, shareholders, members, is returned to the community.

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

It's also important to think about what the benefit is.

So now look at the different lens.