This is Earnings Per Share, not total earnings.

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

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

Company A made 1 per share. 1 of EPS.

Profitable.

That's 0.35 per share of EPS.

So a plus b have to be equal to 50.

Sometime people just say EPS for this company in 2008 was, and in this case you take 350,000, your total earnings, divided by the total number of shares you have.

So let's look at them over the course of one year.

So notice.

Invest financial assistance, but also management assistance.

Maybe Abby made 50 and Ben earned 0.

And we can eyeball it right here.

Because when someone says earnings, are those the earnings last year?

Beneficiary

Fair enough.

The reason why you are willing to pay a higher Price to

And what's left over for the equity?

So let me switch colors just to ease the monotony.

And they were male and female 18 30 and they were casual fans.

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

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.

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

And that total revenue is the same thing as the total expenses plus the profit for that firm and that's the same as this one household's income.So let me write this down.The way we looked at the last thing,

The earnings I just said, this is actually what happened to the company.

Everything on this line would be a valid combination of

So now we add an interesting line.

And if you are an investor, you're probably going to want to do the last of the three.

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

In the last video I talk about how both Ben's Shoes and Jason' shoes are fundamentally the same business but they have different capital structures.

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

Abby earned 10 more than Ben.

And that's because they have the same exact asset.

Let's compare EBlT to operating profit.

And why don't you like them as much?

So the price would be 100.

Another type of revenue model is licensing.

It's time to monetise the thing.

And how they were going to create demand was through search ads, social media, stadium promotions.

If I do not earn anything on top, I would still have 1000 Euros total income.

Are you with me?

And the first one is that this whole idea about revenue stream, Steve, I get it.

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

What does that tell us?

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