In this example that I did in the previous video, it was the pre tax return on asset.

Today, we are going to talk about revenue models.

But for our sake, let's just say that when you give the widget, you have earned the money that they give you, and that's revenue sales.

The difference with Ecosia though is that, in Ecosia's case, it draws the revenues in the same way, but it allocates 80 percent of those revenues to a rainforest protection project in the Amazon.

Which it seems like a really good deal, because now the

We talked about the potential ways to charge

Profitable.

The price per share, the market price per share, is 3.50, so you could also say it's trading at a discount to book.

How the main window is divided.

And the first one is that this whole idea about revenue stream, Steve, I get it.

So a plus b have to be equal to 50.

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

If it's growing 100 a year for 20 years, this is actually a very good deal.

The Price to Earnings ratio is equal to the price so 3.50 divided by the earnings per share.

So let's look at them over the course of one year.

So notice.

Invest financial assistance, but also management assistance.

Maybe Abby made 50 and Ben earned 0.

And we can eyeball it right here.

Because when someone says earnings, are those the earnings last year?

This is unreported income gained from an illegal venture.

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

Maybe they're intangible assets.

And what type of a return can they get?

The reason why you are willing to pay a higher Price to

And what's left over for the equity?

So let me switch colors just to ease the monotony.

And they were male and female 18 30 and they were casual fans.

And so you can already imagine that both EBlT and the way I defined it initially, operating profit divided by assets.

So we can make this explicit by a negative reward per state or we can bring in a discount factor that discounts the plus 100 by the number of steps that it went by before it reached the plus 100.

The earnings I just said, this is actually what happened to the company.

Special rates for state and federal employees.

So this is just the same thing as net income plus interest plus taxes.

Everything on this line would be a valid combination of

So now we add an interesting line.

So they both deserve at least a price to earnings of 10.

Another way to kind of just talk about this is to get the present value of 110 a year from now, we discount the value by a discount rate.

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

Discount rate

Now what can we do ?

Abby earned 10 more than Ben.

And that's because they have the same exact asset.

Let's compare EBlT to operating profit.

And why don't you like them as much?

So the price would be 100.