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

Yep, that's right.

Company A made 1 per share. 1 of EPS.

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

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

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

It affects your sales model. Are you going to hire direct sales? When do you hire them?

I'll just abbreviate that as Nl.

The taxes will be 153,000.

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

This is 350,000 of net income.

This guy makes what is this?

This is a pretty profitable business, more profitable than most.

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.

Before Interest and Taxes.

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.

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

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

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

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.

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.

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

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.

Left margin

Right margin

Top margin

Bottom margin

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.

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.

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

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?

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?

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

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

So this is trailing 12 months earnings.