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

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

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

It is a cost effective approach.

Utilities are still rewarded when their customers waste energy.

There is no doubt about what they have done.

And two dollars profit per entrepreneur per day, which is like 700 dollars per year. And of course, it's very beneficial in a lot of ways.

Fair enough.

It's good for everybody.

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.

With trade, there's mutual interdependency and mutual gain between parties.

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

They buy more of your service and they tell more of their friends, which leads to more profit.

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.

We know how much it takes to build our product.

So if we could chop that away and give the building a small bottom, we could take that bit and put it at the top where the greater commercial value is for a property developer.

That's kind of a lot of money

That information then needs to be connected to choices, needs to be connected to a range of options, directions that we might go to trade offs, benefits.

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

MlT actually lived by its actions.

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

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

Minus 50,000.

I'll just abbreviate that as Nl.

The assets are generating this.

Kill the goose that lays the golden eggs.

And even if they all kind of know that things are a little bit too expensive.

And then if you subtract your costs from your revenue, or if you just add these two numbers, because this one is negative, you have your gross profit.

The success of our overseas partnerships, the growing profits of our web sites, the flight to quality for our fashion and shelter books clive, I could do this in my sleep.

last year, they made profits of over 700 million dollars and over 500 million dollars respectively.

He said to his sweetie, Let us marry.

Reading improves the mind.

In order for this to come out to be zero, the gross profit has to be 500,000.

So, let's see, you have to do 1.85.

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.

Now Coke has a very clear bottom line they report to a set of shareholders, they have to turn a profit.

Very good. It increases both dexterity and direction.

Pearl Jam, 96 albums released in the last two years.

Minus 500,000.

It never reaches the ground where it was meant for.

Even when a Canadian cheats the system, they do it in a way that benefits society.

I'm going to take the cost of what it takes me to build the product, and I'm going to add some fixed markup whatever I think my profit should be.

Now, the CEO of Goldman Sachs Lloyd Blankfein is hailed as maybe the greatest genius since Einstein.