And so you're almost ready.

Are you with me?

Profitable.

Invest financial assistance, but also management assistance.

You can probably guess.

So that's a little bit of a taste of why someone might realistically, in this case, pay a higher Price to Earnings for safety.

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

So a plus b have to be equal to 50.

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

So notice.

Let's compare EBlT to operating profit.

It's time to monetise the thing.

You get 400 from the customer the previous month.

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?

And how they were going to create demand was through search ads, social media, stadium promotions.

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.

What does that tell us?

At the end of the month we count your clicks

This is Earnings Per Share, not total earnings.

It's just 10 because one, this is a nice round number.

It's the same plot.

When? I said it's time to monetise the site.

I say it's time to start making money from The Facebook, but Mark doesn't want advertising.

The investment now yields him 6 .

And the way that you account for this 200 in advance from a customer, is you call that deferred revenue.

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

The first thing you have to figure out is what's the revenue stream

And so I'm left with net income of 350,000.

Everything on this line would be a valid combination of

So now we add an interesting line.

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

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

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

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

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

That's 0.35 per share of EPS.

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

Have you seen the latest figures, children?

Once you add it all up, though, and with Keller, the revenues are almost 10 less than was actually received.

Abby earned 10 more than Ben.

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