Let's say this is what we assume is how many cupcakes we sell.

So this kind of the cash income statement,

This is just the money directly from the cupcakes.

And we'll make it more complicated in the future

Let's see if we can use our example to understand the 3 types of income statements and hopefully understanding those income statements will also help us understand this example.

How much am I making from operating the business?

And then in month 4 we actually earned the revenue.

And most of the time, there's no backup for the reported revenues at all.

No. I want a period on this sentence.

So this right here you could view as our income statement.

So my return on asset is 7 .

Give a better indication of what's actually going on in the buisness, and the way I did it in the first two videos, the first column over here

And I won't go into all of the details of an income statement, but any income statement you look at will have this operating profit line.

And I'll write the common acronym in there, COGS.

The company announced a profit of 200 million after tax.

The loss amounted to 100 dollars.

One of the interesting thing about costs is that in the old days costs and revenue, the minute you started your company, your investors said oh, we know how to track all this.

But for our sake, let's just say that when you give the widget, you have earned the money that they give you, and that's revenue sales.

The loss amounts to ten million dollars.

So as you see here, if I charge 2.80 and I only sell 300,000, then this is my return on asset right here.

And when there is mutual gain, both sides stand to lose more than they would gain if they started a war.

The damage amounted to five million yen.

But what you really need to be doing is working with your investors and your management team is to derive the metrics that matter.

So hopefully this gives you a idea of why accrual gives a better picture of what's happening in a buisness.

The extent of the damage is inestimable.

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

The loss adds up to more than one million dollars.

The plan backfired on us and we lost a lot of money.

I put my software and IBM together

And so you're almost ready.

Anyway, factory tooling.

My head I think implicitly made the numbers work out nicely.

So it will benefit, because you are discounting some of the cash payments.

And here we'll literally just take whatever is reported from the income statement.

Simply put, we hate losing what we've got.

Fair enough.

In proportion as the sales increase, the profit will rise.

You get better decision making, and you get less herd behavior, and both of those things hit your bottom line with very positive results.

Upper total

I'm going to prevent a huge amount of damage that he could cause.

Give full measure and do not cheat

Measure in full, and do not be of those who reduce.

Fill up the measure, and be not cheaters,

Give full measure, and be not of those who cause others to lose.

Give full measure, and cause no loss (to others).