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

At any given price point, higher quantity demanded.

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

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

But if you look here, by giving the same price to earnings, because they're the same business.

Maybe Abby made 50 and Ben earned 0.

So a plus b have to be equal to 50.

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

letting their neighbors use their car when they're not using it.

They're all jumbled up as just kind of the company is making this much money.

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

let's do it on an accrual basis.

Profitable.

So something very interesting is happening.

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

One is, you could kind of flip this.

So the amount that this number grows by, the amount that our equity grows by, is earnings.

And we can eyeball it right here.

And you're going to pay a lower Price to Earnings ratio if the company isn't growing.

But today we re going to be talking about revenue streams.

And the first thing we need to figure out is, what is our revenue model.

You can probably guess.

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

But I just want to give you the gist of what's happening.

Well in this case, you're uncertain about the earnings stream.

So now if you do a Price to Earnings on 2010 earnings so this is 18 months out from when this video is being made all of a sudden, your Price to Earnings relative to 2010 earnings is 4 for Company A.

So, a mass of new discoveries.

Everything on this line would be a valid combination of

So now we add an interesting line.

This is unreported income gained from an illegal venture.

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And we add back the interest, at least in this example, we get to an operating profit number.

Probably closer to 45 to 90 days.

In this case, we use last year's earnings.

So a lot of people immediately will figure out the Price to

Anyway, going back to Price to Earnings, we calculated the

Then whatever this generates is actually non operating income.

I found six other instances of revenues being underreported.

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

Let me say that again.

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

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

So notice.

Invest financial assistance, but also management assistance.

Today, we are going to talk about revenue models.