So operating profit.

So their operating profit.

This was operating profit.

So this is operating profit.

And so their operating profit, the amount of pre tax income, but you know, we're not considering financing either, so this is their operating profit or their EBlT.

Let's compare EBlT to operating profit.

And this is called operating profit.

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.

So my operating profit here is 1 million.

It's from the business itself, operating profit, and since these are identical businesses, they have the same exact operating profit.

And then their pre tax profit is going to be the same thing as the operating profit, so minus 100,000, minus 100,000, 400,000 I'll make the good years in green 400,000.

And that's how much operating profit my widget company has produced.

They're the things that are needed to generate the operating profit.

So if my operating profit is zero, we know my overhead.

So my operating profit is really my profit because I don't have to pay taxes on it.

You add the profit to the depreciation, you get a 50,000 operating profit same as the previous year.

or cortical visual impairment.

EBlT in this case would be the operating profit plus this investment income.

While operating profit, you start at the top line and you go down.

Probably. It's a functional impairment.

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?

And then the very first definition I gave you was operating profit over assets.

That's 500,000 a year. So my operating profit is 500,000 and that's pretty good.

And from then I wanted to look not at impairment, but at prevention of impairment.

Pre

I mean, the functional impairment is clear.

And the reason why there's a different term is, sometimes you can have the non operating profit.

ROA, I would say it's EBlT over assets, which is very close to operating profit over assets.

And the way we saw that is that, their everything, their revenue, gross profit all the way down to their operating profit was exactly the same.

So this is the operating profit. This is the money that just comes out of the asset itself.

So we have to essentially take half of our operating profit and give it back to the bank.

And we add back the interest, at least in this example, we get to an operating profit number.

This has visual impairment as a side effect.

Operating System

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So let's say I just want to know what has to happen for my operating profit to be zero.

Non operating income.

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