So let's start with the data.

Profitable.

So a plus b have to be equal to 50.

If it's growing 100 a year for 20 years, this is actually a very good deal.

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

So notice.

Invest financial assistance, but also management assistance.

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

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?

And it's also sometimes called algo trading, algorithmic trading.

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.

And he said, It's funny you ask that, because it's actually called black box trading.

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.

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

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.

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?

At the end of the month we count your clicks

This is Earnings Per Share, not total earnings.

It's just 10 because one, this is a nice round number.

It's the same plot.

How is it that you make money?

It's just a faster way of saying

When? I said it's time to monetise the site.

I say it's time to start making money from The Facebook, but Mark doesn't want advertising.

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

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 first thing you have to figure out is what's the revenue stream

looks neutral.