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

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.

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

Utilities are still rewarded when their customers waste energy.

And when there is mutual gain, both sides stand to lose more than they would gain if they started a war.

There is no doubt about what they have done.

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

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?

Fair enough.

It's good for everybody.

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.

But again, fun is not enough.

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

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.

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.

We know how much it takes to build our product.

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

That's kind of a lot of money

MlT actually lived by its actions.

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

In your country, there might be the equivalent of government fund.

In return on equity, the numerator is the net income that we got, so it's 350,000.

Minus 50,000.

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

I'll just abbreviate that as Nl.

What's in it for the institution?

The assets are generating this.

Kill the goose that lays the golden eggs.

So I could monetize fancy name for make from all those users not from making them pay, because the last time I

And it has been a powerful marketplace differentiator, increasing sales and profits.

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 this is what people are talking about when they say treasury prices go up, if treasury prices go up then the yields go down

last year, they made profits of over 700 million dollars and over 500 million dollars respectively.

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

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.

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

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

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

Pearl Jam, 96 albums released in the last two years.

Minus 500,000.

So it will benefit, because you are discounting some of the cash payments.

I'm going to take the cost of what it takes me to build the product, and I'm going to add some fixed markup whatever I think my profit should be.

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