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

Yep, that's right.

Company A made 1 per share. 1 of EPS.

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

So then you're having, you have your net income, your net income during the period.

Net profit for the period is estimated at 5 billion yen, largely unchanged from the previous one.

The taxes will be 153,000.

I'll just abbreviate that as Nl.

This guy makes what is this?

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

Before Interest and Taxes.

This is 350,000 of net income.

So you've probably heard not only the term earnings, you've probably also heard the term earnings per share.

Net profit comes to 10 million dollars every year.

This guy makes 21,000.

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.

Our profit here, if we just take the number that we have here,

So that's what I'm paying for, arguably.

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?

Because during conflict economic policy typically deteriorates.

He's not my boyfriend, it's just platonic love with benefits!

Following a joint statement by Vivendi and electricity giant VFM..

Minus 500,000.

It's part of business aspect of work and making things you don't have to look at the bottom line on

And then they'll say well in the most naive interpretation of things, you net income in theory should be the cash you're getting or at least it's some type of profit you're getting assets in the door or at least you're counting as if you're getting some assets in the door.

So most cash flow statements, they'll start so I'm going to do a cash flow statement right over here

Before I go into price to earnings and all that, I want to connect the dots between the income statement and the balance sheet.

And this is what goes to the owners of the company.

If we're doing a financial model and if we say our revenue has a normal distribution around some expected value, what is the distribution of our net income?

So this is trailing 12 months earnings.

They're literally saying, Google made 3 billion in net income.

Because that's not the point of this, but you can apply some tax rate to this and figure out what their net income is.

Money lenders are enjoying a profitable period.

Our interests clash with theirs.

They've been good performers in profits and dividends.

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.

Let's compare EBlT to operating profit.

And why don't you like them as much?

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

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

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

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

Go ahead, eat.

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.