Minus 500,000.

So you take the interest out.

And you could guess what the next line is going to be, given that this says pre tax.

And now we are left with our we're getting close to where we need to get to pre tax income.

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

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

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.

The company's profit amounted to 250 million before tax.

It's dependent on how the operations were financed.

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?

PUMA has 2.7 billion dollars of turnover, 300 million dollars of profits, 200 million dollars after tax, 94 million dollars of externalities, cost to business.

I did in that last video it might be interesting to say, is that the pre tax or the post tax return on asset.

The company announced a profit of 200 million after tax.

Are the profits exclusive of taxes?

Before Interest and Taxes.

In this example that I did in the previous video, it was the pre tax return on asset.

And so you can already imagine that both EBlT and the way I defined it initially, operating profit divided by assets.

But the point of this is, even though their business is ultra stable, they do the exact same thing every year, when we look at the pre tax or the operating income, or if we tax it, or even at the net income, we see a super lumpy business, because in one year they lost 100,000.

And we were to add back the taxes and the interest.

When we did return on asset, we looked at the operating profit, because this is what our company generated before we paid the bank or Uncle Sam or anything like that.

Kill the goose that lays the golden eggs.

You can either profit by this or be destroyed.

He claimed his share of the profits.

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

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

Our interests clash with theirs.

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.

The taxes will be 153,000.

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

Very prudent.

I'll just abbreviate that as Nl.

Go ahead, eat.

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

So this is just the same thing as net income plus interest plus taxes.

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.

FDlC insured.

The rewards would be... enormous.

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

And also you can deduct, actually, the property tax.

And the result is, right now, this company is the largest telephone company, with 3.5 million subscribers, 115,000 of these phones I talked about that produces about a third of the traffic in the network.

And of course the difference is the money that he had to spend on tax.

And what tax deductible means, is that this amount of money that I spend on interest on my mortgage,

So basically Republicans who make more than 250,000 dollars a year don't want to be taxed.