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

You want to have a lower Price to Earnings ratio for the same asset.

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

But, of course, that's not the money that we get to take home, because we have to pay this interest.

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?

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.

You can either profit by this or be destroyed.

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,

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

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.

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

That information then needs to be connected to choices, needs to be connected to a range of options, directions that we might go to trade offs, benefits.

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.

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.

I put my software and IBM together

To do that, we would actually have to take and you might want to watch the video on this if you were to let that just compound, and you can imagine if you're the payday

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

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

Utilities are still rewarded when their customers waste energy.

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.

Minus 500,000.

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

We could evaporate it to enhance the restorative benefits and capture the salts, transforming an urgent waste problem into a big opportunity.

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

The taxes will be 153,000.

War does have its benefits...

But just so you know what EBlT is, EBlT is just Earnings

I'm not a charity commissioner.

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.

Science comes first, but business comes a close fucking second.