through the income statement .
We talked about income statement investing, where you're offering the customer an unusual bargain to grow scale and grow the size of your moat.
This EVA income statement is unique for its own two reasons.
The other income statement here that's noteworthy is the interest expense or cost of capital which is about $5.7 billion.
With the enterprise income statement , we can see that there's a tighter correlation between GAAP profits and enterprise profits.
People are looking much more at the income statement .
And their argument is that the GAAP income statement which we see here in the center, it doesn't tell you how much cash is coming in and out of a company.
Their thesis was based on the income statement .
And often it was the enterprising income statement .
worth of charges to the income statement , some periods as much as $3 billion, because global equities collapsed.
If you think about an income statement , you have revenue on the top and net income on the bottom.
But the vertical depiction of an income statement really kind of helps show the way that we think about things.
And they introduce what's called a free cash flow income statement .
When do I use the free cash flow income statement and when do I use the EVA income statement ?
And that's the way the free cash flow income statement works.
So I want to make a proposal that the GAAP income statement is too, "venture capitalist" for the defensive investor and is too,
And what I found is that often the defensive income statement told you that the company had poor earnings quality and you should go on high alert.
Because it's very hard under IFRS to stash bribes in an income statement .
But they don't want to clutter up the balance sheet or income statement with materiality.
And the only way you get there is by having the capacity to let the income statement bear the burden.
But what do you do need to understand is what's an income statement ?
Look at the balance sheet, then let's look at the income statement .
had to do when they used to look at their financials, just ask for a separate income statement balance sheet of these entities, and they
And so in this approach, we are going to reject the GAAP income statement , because it's like being half pregnant.
But the way that you are arranging them, and the way that you are putting them in a balance sheet or an income statement ,
If you look at something like 2008, you'll see in one of the years he passed through his income statement a $6 billion quote, unquote "loss."
The real trick was that, having bought it at $720, they now recognize they have a billion dollars that will be passed through the income statement putting it
They're going to be spending a tremendous amount of money, and that's going to burden the income statement for the foreseeable future.
The average operating margin-- so this is not net profit margin, this is higher up in the income statement -- is 4.4%.
So that's a $8.5 billion of cash that's coming out of your corporate checking account that does not appear in the GAAP income statement .
But what happened to me is in middle management, when I was at CNBC, somebody handed me an income statement , right?
To the extent that I have concerns about a company, they're in direct proportion to where they reside on the income statement .
And part of the reason, as John has demonstrated, the income statement is not the only one, but a large place where the shenanigans--