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

I'll just abbreviate that as Nl.

The taxes will be 153,000.

I put my software and IBM together

This is 350,000 of net income.

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

This guy makes what is this?

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

This guy makes 21,000.

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

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

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.

People tend to place a much higher value on losses than on gains.

Net profit comes to 10 million dollars every year.

Yep, that's right.

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

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

Company A made 1 per share. 1 of EPS.

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?

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

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

So most cash flow statements, they'll start so I'm going to do a cash flow statement right over here

It's part of business aspect of work and making things you don't have to look at the bottom line on

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

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.

And why don't you like them as much?

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.

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

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

Either they are going to unlock an awful lot of economic opportunity and make a percentage on all of it or it's all going to crash and burn, which is tough on their shareholders.

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.

Our interests clash with theirs.

Minus 500,000.

And each day, the flow of profits and where they go...

Because that's not the point of this, but you can apply some tax rate to this and figure out what their net income is.

loss of sexual desire .

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.

LADY CAPULET So shall you feel the loss, but not the friend Which you weep for.

Net profit for the last three months is a new record high!

Let's compare EBlT to operating profit.

Kill the goose that lays the golden eggs.

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