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.

Minus 500,000.

And then, how much am I making from the business now?

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.

But here you see it means very, very different things.

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

I'll just abbreviate that as Nl.

Go ahead, eat.

We'll see how to use cryptography to manage passwords, and user accounts.

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

Our interests clash with theirs.

So let's just think about this a little bit.

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

So what's the profit going to be? So let me write this down.

Both of them are equilibriums because neither of the players can benefit from switching to the other strategy.

Kill the goose that lays the golden eggs.

The taxes will be 153,000.

I'm not a charity commissioner.

A benefit to both our worlds.

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

But anyway, here I want to figure out what is my return on asset?

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.

So that's a nice thing to keep in the back of your mind, this return on asset concept, and it's very closely tied to operating profits and the actual assets of a firm.

And that's what these brands did.

FDlC insured.

And that's my dad found that.

The rewards would be... enormous.

I realized that for the greater good, I had to let him go.

This is complex stuff, not required for the homework at all but this is how I wanted to create that effect.

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

Before Interest and Taxes.

Over here, this axis right here is going to be the selling price,

The reason this is happening boils down, in my mind, to one basic problem, which is our inability to perceive the difference between public benefits and private profits.

This is 350,000 of net income.

This was interest. This was non op income.

This guy makes what is this?

And then I was left with 1 million.

It's good for everybody.

Fair enough.

Why make this thing?

Why isn't it on every poster across the third world?

And we had no expenses in that month.

All they care about is profits.