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 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.

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?

So most cash flow statements, they'll start so I'm going to do a cash flow statement right over here

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

The pie's getting bigger because these are real investments that are going to benefit my village.

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

War does have its benefits...

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

Utilities are still rewarded when their customers waste energy.

Turns out Singapore and Hong Kong are cities that made huge gains on the value of the land that they owned when they got started.

So this is the operating profit. This is the money that just comes out of the asset itself.

They're generating the operating profit, and that's a very important thing to realize in the future when we talk about return on assets.

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

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

This is 350,000 of net income.

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

The assets are generating this.

It's good for everybody.

So, let's see, you have to do 1.85.

That's what it is generating.

And this is the profit from the operations of the company, or you could say from the assets or from the business or from the enterprise of the company.

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.

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

I'm making 300,000 by providing this service by matching up the savings with good investments.

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

labeled relish where they'd be crushed and mixed with vinegar and used for other kinds of profit.

If I could borrow some of their money and use it to pay people that will essentially do the goods and service or do the new project, then I'll generate wealth.

They have to give permission to let the stock be borrowed, and they benefit, because they get some cut, hopefully, they get some cut of the rent, or the interest that I'm paying.

Just because I know that these guys like me.

In other words, I only get paid if you profit from my advice.

The new story about climate protection is that it's not costly, but profitable.

And then, how much am I making from the business now?

Let's say this is what we assume is how many cupcakes we sell.

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

Let no one appropriate a common benefit.

Are the profits exclusive of taxes?

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?

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

And then I'll do a more philosophical video on why these things even exist, and why they're useful, and why people may benefit or may not benefit from these things.

You'll see this TTM sometimes.

That actually brought the entire search industry from on its way down to being one of the most profitable parts of web commerce.

And we had no expenses in that month.