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

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

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

Profitable.

But when you lower the Price to Earnings you are increasing the Earnings to Price.

Company A made 1 per share. 1 of EPS.

And you might wonder, where does that come from?

So a plus b have to be equal to 50.

But just so you know what EBlT is, EBlT is just Earnings

This is unreported income gained from an illegal venture.

But the reason I wanted do to Earnings to Price is because it connects it back to things like yield and interest.

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

So notice.

Invest financial assistance, but also management assistance.

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?

But in general if you take EBlT and you take out the non operating income, you get back to operating profits.

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.

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.

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

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.

ladies and gentlemen, does not create wealth for them.

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

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

Everything on this line would be a valid combination of

So now we add an interesting line.

And if we see how they graphed things here, on the vertical axis, what we normally associate with the y axis, they graphed Abby's earnings.

I'll just abbreviate that as Nl.

Go ahead, eat.

Our interests clash with theirs.

Abby earned 10 more than Ben.

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

Let's compare EBlT to operating profit.

And why don't you like them as much?

So the price would be 100.

Another type of revenue model is licensing.

It's time to monetise the thing.

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

People really like to have sex.

Are you with me?