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

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.

Company A made 1 per share. 1 of EPS.

Yep, that's right.

Our interests clash with theirs.

Minus 500,000.

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.

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.

So this is trailing 12 months earnings.

I'll just abbreviate that as Nl.

Go ahead, eat.

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

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

They've been good performers in profits and dividends.

Why make this thing?

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

All they care about is profits.

No one wants it to go off.

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.

It is to his advantage.

No pain, no gain.

No gains without pains.

Kill the goose that lays the golden eggs.

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

The taxes will be 153,000.

I'm not a charity commissioner.

A benefit to both our worlds.

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.

They have no interest expense, because that's not the point of this video.

When it's rainy and windy, he gives up.

It's a special interest group?

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.

Net profit comes to 10 million dollars every year.

Company is 10.

What costs are associated with these decisions?

If they start to abuse their power, serving the interests of a selected few, instead of the common interest...

Before Interest and Taxes.