Welcome to Digital Asset News to get top stories in cryptocurrencies and digital assets and break them down to bite-sized pieces. Today, we've got three great stories and it's all about mass adoption. So first up, Huobi is now the first major crypto exchange running a Chainlink node. And this is on top of what Binance is doing already. Also Cardano developer IOHK kicks off a Shelley Virtual Summit by unveiling huge plans for the Cardano ecosystem and one that I was totally blown away by. And last up, institutions are coming in, DROVE's New York-based asset manager secures $190 million for Bitcoin fund. And this is just one more example of institutions fomoing in. But before we get to that, let's take a look at what's going on with the market. So today it is July 3rd, 2020. It looks like it's about 1230 Texas time. So Bitcoin is just barely hanging on to the 9,000 position. I think it actually went down a little bit below that, but right now this is what it's showing. So 9,000 with a gain of a fantastic 0.1%. Ethereum holding strong 226, Tether's Tether, XRP's XRP, and Bitcoin Cash and Cardano. Wow, look at that, Cardano in the sweet number 6th place. Up 7.7%. I can only assume why that is and everything is pretty much the same EOS up a little bit. So great for them. Fantastic. Let's just jump right in. So, you know, when I see articles like this, this gets me excited and why is it getting me excited? Because I am biased. I own Chainlink. I also want a bunch of other things that we're going to talk about today. So if you wonder like, hmm, what do I digital asset news is actually talking about this stuff? It's because I own it. And just to make things clear, this is exactly what I own. Bitcoin, Ethereum, XRP, Cardano, EOS, Chainlink, Tezos, and Stellar. So if I talk about these projects a lot, it's because I own them. I try not to be as biased as possible, but it just kind of sneaks in. So that's just me being transparent. But let's get into it. So, major cryptocurrency exchange, Huobi, has announced it is becoming the first major trading platform to start running a Chainlink node and integrate its price data in Chainlink's ecosystem. Huobi will use Chainlink's external adapters to make the Huobi Exchange API available to smart contracts, which will allow developers to access the exchange's price data. The first supported pairs will be Bitcoin to Ethereum, USDT, USDT, ETH, USDT. So fantastic news. Looks like Chainlink is going to be available all the way throughout for multiple pairs. So this is good. Now, if you're not familiar with Chainlink, what it allows it to do is to pull real-world data by using an API and pull everything into a blockchain, such as on Ethereum and other blockchains. Because blockchains, the problem is that they can't pull outside data into the actual blockchain. They need what's called an oracle, and Chainlink does that very well. Now, I notice people out there that are saying, hey, there are many more oracles out there, and we can use all these different ones, and yeah, that's true. There are other oracles out there, but right now, Chainlink is the one that everybody is choosing, and you've got to go with something, so I like that opportunity. Anyway, I'm moving on. While Binance was the first major crypto exchange to provide their data on Chainlink oracles, Huobi will be running its own node on the cryptocurrency's blockchain, the Huobi Wallet. The node will let it sign its own price data, allow users to be able to verify that it's actually authentic, and Will Wang, who will be Wallet's CEO, said the DeFi space offers a unique value proposition of providing financial products that are transparent, open, and programmable. He also states, we are very excited to accelerate our involvement in this emerging trend by providing Chainlink users access to Huobi global exchange data, as well as running our own Chainlink node. I got to say, this is what I've always been talking about in this channel, which is Ethereum is really a $10,000 coin, and Chainlink right now is around $470, maybe hit $5, I don't know how much it is right now, but it's about between a $50 and $150 coin. I'm just going to, I'll just round it off. I'll say it's $100 coin. It's going to be everywhere. It's going to be used with API. It's going to pull all the data into all these different blockchain that can't do it by themselves, and I think it's going to be huge. The ace in the hole, I think, is DeFi, and it's what's really going to expand this whole space. That is just my theory, but I see it actually happening.  I mean, getting a house is one thing, to go through a bank and get your mortgage and all that stuff. But to go there and get a small business loan, it's a nightmare, and they never really want to loan you money when you actually need it. It's when you don't need it, and now all of a sudden they're like, hey, we can give you all these loans. I'm like, where were you six months to a year ago when I actually could have used you guys? So, with DeFi, if you can put different things up and just get it without the loopholes, I mean, I'm telling you right now, DeFi is something for retail investors great for individuals, but when small businesses really figure it out, it's going to explode. That's just how it's going to be. Moving on, Huawei Wallet already secures a total of 10 million in crypto assets for projects like Atom, Ontology, and Loom. Chainlink, the post-adds, has established itself as a market leader when it comes to oracles, which are quickly becoming one of the most important pieces of infrastructure in moving the blockchain space beyond tokens. It provides smart contracts with universal access to real-world data, off-chain events, and traditional payment infrastructure. Huawei also pointed out that Chainlink is the most used oracle in the decentralized finance ecosystem and is integrated on various other blockchains, including Tezos, Polkadot, and Cosmos. It also works with Google, Oracle, and even that slow as heck one Swift. I mean, thankfully, they're working with Swift because, boy, if anybody needs it, it's Swift. I got to tell you that to transfer money to one of my manufacturers for my Amazon business has been a nightmare lately. I had a pretty sizable income for a pretty large order that had just come up.  So one week ago, the bank dragged its feet to get it, and they said, oh, we'll do it as soon as we can. So I had to wait Friday, and the bankers aren't going to work on the weekend. So Saturday, Sunday, that didn't happen. Then on Monday, around 3 or 4 o'clock, the manufacturer sent me an email and said, hey, we got it. We'll ship out these units. It was like 20,000 units to Amazon. So essentially what happened was I lost four days. I lost four days of revenue because the banks suck. So when I see stories like this, I am all on board. I mean, I cannot wait till things actually speed up to where they're supposed to be. I mean, if I can send an email to any one of you that is watching this video, you, I don't know where you are at. If you're in the UK, or Australia, or India, or Canada, whatever else. I can send you an email. And you will get it in seconds. But to send money, which is all digitalized anyhow. I can't do that, even though that I pay these banks the things I do. It is one of those frustrating things, and I'll just leave it as that. Let's move on. Next up, go down developer IOHK kicks off a Shelley Virtual Summit. And this is actually was one of those stories that people were actually asking me about, and I was like, I had heard about it slightly. Let's see what's going on. So what's going on is that during the Shelley Virtual Summit, which started yesterday that was in July 2, IOHK confirmed the successful deployment of the Shelley code to the main net on June 30. And I got to tell you, Charles Hoskinson came out and said, we want to do this. We want to deploy the Shelley code to the main net by June 30. However, we're going to leave it all the way to July 7, just in case there's any kind of hiccups. And it actually happened, which was pretty amazing. So I'm optimistically hopeful. Anyhow, from July 7th, Cardano holders will be able to participate in staking, as well as transfer the coins to wallets that support the upgrade. So from July 7th, I believe all the way to the end of the month, that is when this is going to happen. Now correct me in the comments section, but I will definitely be doing a video on how to transfer your coins to the wallet that is going to support this Shelley main net, because for me as a holder, this is huge news. Moving on, IOHK also announced the launch of a decentralized identity system. Let me read that again. IOHK announced the launch of a decentralized identity system called Attala Prism. With this, millions of unbanked people will have access to social and financial services, including DeFi. I read that and I thought to myself, that's the missing piece. This is, if this actually happens, it really is game over. Because you have to understand that wherever you're out in the world, if you don't have any kind of banking system that you are the unbanked, it makes it extremely difficult for you to either grow your business or just to actually have funds and support you and your family. Think about it. If you have to carry your cash everywhere you go, you're opening yourself up for high risks, crime, different aspects like that. And then also, how do you take out loans for your business or when things are shortchanged? Because everything is just on you because you are unbanked. It makes it extremely difficult. So all these different programs that they have where they're like, oh, well, you can put your money in here, you can do this. You can also, and then my question always was, well, how do you get the fiat, how do you get the actual paper that you have wherever you're at into your whatever it is, like an uphold wallet or ABRA or whatever.  Then you use that debit card. And most people in the world these days have a smartphone. Not everybody, obviously, but there's many more people with a smartphone than there are actual bank accounts. And you take that card, then you punch in the number and then boom, you have your, you are essentially banked into this digital world. So the problem though is that if you have to do like any kind of KYC and AML stuff as time goes on, then you're going to need to know some kind of like identity system. And I think this is the big thing. But it's not only that, I see it like this. If you can have a decentralized identity system and it is a trustless system that has the ability to in some way, shape or form verify your identity, this could be huge for things like voting, record keeping, documents, deeds of trust.  So when I heard about this, I'm like, wow, that is pretty amazing. So I mean, we'll see it's very ambitious. I don't know how it's all gonna work, but hey, they're working on it and we'll see what happens. So on we go. IOHK is also developing Project Catalyst, which is a decentralized treasury fund for Cardano holders. Basically, it'll allow the Cardano community to participate more by deciding on the allocation of funds to suitable projects and voting on important decisions in the network. Project Catalyst will be rolled out in the fourth quarter of this year. And Cardano is currently valued at 10 cents at the time of publication, up about 10%, which we just saw in the last 24 hours. So here's the thing, we haven't had a lot to be excited about as far as Cardano. And I gotta tell you, I mean, I bought it back in 2017 and I just saw it just tumble and tumble and tumble, but these are good days. These are optimistic days and hopefully it all works out and hopefully things can actually keep on building. But who knows, it is cryptocurrency assets, so we will see, but as time goes on and they start to talk about staking and transferring coins to the wallet, I will definitely do a video on it and I'm excited about that. Next up. So last story, this was a pretty interesting New York based asset manager, secures 190 million for Bitcoin Fund. The New York Digital Investments Group, or NYDIG, has raised 190 million for a Bitcoin Fund called the NYDIG Institutional Bitcoin Fund LP according to a filing with the SEC. Bitcoin Fund is 24 unnamed investors. Oh, I'd love to know those names. And was originally registered with the Securities and Exchange Commission in 2018. It originally raised 31 million and in 2019 it raised 54 million from six other investors. The fund has grown to almost 200 million cents. Notably, NYDIG made headlines back in May, I guess, after closing a 140 million fund called the Bitcoin Yield Enhancement Fund. Forbes reported it's unclear whether the funds are different. If they are indeed different or the same, then the NYDIG has become one of the largest institutional investors in the crypto space in the US with a total of 330 million investors or invested in Bitcoin across both funds. The NYDIG is a holder of the coveted Bit License. Here's where it gets interesting. And I've always talked about this on the channel. It's not about what you know, it is who you know. So listen to this. They are the holder of the coveted Bit License from the New York State Department of Financial Services, NYDFS, which makes it a regulated entity in the state. The former financial regulator who created the Bit License in 2015, Benjamin Lasky, joined the fund manager last year, 11 months before it received the license. So how big of an asset is that guy for that company? They must have paid him a premium to get him over there because you know how many people actually apply for and actually get accepted? Not too many. So of course, Benjamin Lasky, it's all about companies themselves. It's all about who you know, not what you know. Even if the new fund is rebrand, NYDIG is a new major institutional player in the crypto space. Institutional investing in the space has so far been dominated by grayscale investments which has over now four billion worth of assets under management. So this is always big news when we see institutional investors. And I think that the more that come in, first of all, it's a double-edged sword. The more they come in, the better it is for the space because the more they can kind of pull things in.   And especially when you get financial analysts or financial planners kind of sucked them the same way and they start to tell their clients like, hey, we should do this and allocate 1% or 3%.  In 2017, we thought these institutional investors were actually gonna be here and they weren't really here. And now you can see it all over the place. So I'm gonna definitely be adding these to people like Fidelity digital assets with their seven trillion assets under management. And on top of Fidelity being just the institutional investors, they've also been tasked with being a custodian for a new Bitcoin trust. And this is the one through the Wilshire Phoenix Bitcoin trust. So they're doing a double duty. So they have custodial services and then they have assets under management as far as digital assets. And then BACT is already in there. BACT and Galaxy Digital, they're gonna offer custodial services on top of Nomura and being with Colmenu. And that's on top of all the other institutions that are here like TD Ameritrade with their one trillion assets under management. You've got the big guys, Greyscale ladies talked about. And this was, remember, this is quarter one 2020 when they had a paltry 2.2 billion. Now they have what, four billion it said. So not too bad. On top of, and this is more like a, not a popularity contest, but something along those lines because Paul Tudor Jones, he was like an investment legend from like the 80s and early 90s. And his group, which has, you know, 21 billion assets under management, he just came out on May and said, hey, I'm gonna put 2% of the total investments into Bitcoin futures. So all these different people that are in the traditional market are like, hey, Paul Tudor Jones, the legend is doing this, we should get into it. I think that's probably the reason why we're seeing all these different things happen. So I'm excited, three great stories today. Thanks for sticking with me. I really appreciate it. And hopefully we'll see some more mass adoption. Now, before we take off, if you got a couple minutes, I like it to stick with me for scam of the day. So I actually posted this yesterday, late at night. This actually came up on my feed. And it looked, to me, it looked just like, I mean, this is what Joe Rogan's podcast looks like, exactly like this. Experience number 1502, finance and blockchain, 69,000 watching, 69,000 watching. And there was a nice little giveaway of 5,000 Bitcoin. So you're looking at this and like, all this appears on my feed normally, except for this part, give away 5,000 Bitcoin. Now I know what that is. You know what that is. But the uninitiated has no idea what that is. So when I saw that, I immediately posted it and I said, Hey, there's no scam.  Please downvote and report.  So, but I don't know if YouTube took it down because it says this video isn't publicly available. So whoever is doing that, usually if YouTube removes it, it says this has been removed by YouTube, you know, guidelines, whatever else. But these people made it, they took it from public to private because they knew it was gonna get taken down. So, hey, that's a step. I don't see why YouTube doesn't have the ability to take it out or whatever. So that inspires me. I like to see that. So if you got a couple of minutes, let's do one more. So this is the scam of the day. In the description of every one of my videos, there's gonna be a link in the description. It's gonna say scam of the day. And you click on that and it's gonna take you, these are all the ones that we've gotten rid of so far. So not too shabby, but we got a couple more that we need to get rid of. This is the newest one. It's just the dumbest one, but sure. It's Kylie Jenner interview, which amazingly has over 17 on her views. And this, if you watch the whole thing, I have not yet. But someone told me that she's not even talking about Bitcoin, which is not a surprise. But however you see it right here, it says to participate. You need to send between 0.1 Bitcoin to 20 Bitcoin to the address. And we'll send it back to you twice the amount you sent. So how do we know this is a scam? Because you can't just take my word for it, right? All the stuff I tell you, you shouldn't take just my word for it. So first thing, we wanna take a look at the comments. Well, the comments are turned off. So that's a red flag. Second of all, we're gonna take a look for what's called an asymmetrical giveaway. So if I see something where someone's like, hey, send me one, I'll send you two. Or send me two and I'll send you 20. That's an asymmetrical giveaway. So here's the thing about scams. You are not special. Nobody will send you free money and that's just the truth. I don't care if there even is a legit thing, treat everything like a scam until proven otherwise and you'll be a lot happier. So what do we do? The first thing we're gonna do is we're gonna dislike it, which we've already done. And the next thing we're gonna do is we're gonna click on the three dots. And we're gonna click report. And I'm gonna say this is spam. Again, I cannot believe I gotta do this two times. Scams and fraud and next. And just say whatever you want. Like I say, this is a scam and just report. So that's the big thing. And if you ever are curious about like, well, this is a scam, we're not a scam.  Just send them an email. I mean, you can't send Elon Musk an email which you can send Tesla an email and say, hey, is somebody giving away, is Elon Musk giving away free Bitcoin? They'll tell you no. Send some to Binance. Hey, you guys giving away free Bitcoin? No. Send the coin? No. I mean, you can't send it to College Enter but I'm just gonna tell you right now, it's not a real thing. It's a scam. So if you ever are curious, just go ahead and send somebody an email. And they'll get back to them 24 hours usually and then that's it. So look, I appreciate you sticking with me to the scam of the day. If you got time, go ahead and do that. I really appreciate it. And also, I wanna say thanks to my supporters. So level ones, they pay a couple of bucks. Thanks to everybody. Level two, they pay a little more and I give them a shout out. So shout out to All Right Soft. When Mullet, myself, who else? Dave Plummer, Grant Sharman, Bruce Wood, Baking Benjamin's, Noel, Flippin' Vegas, Martin Lewin, Michael Ralph, William Howell, Crazy Crypto Canuck, Tessie, Ryusaki, Positive, Trock, LLC, J.C. Durick's, Crypto Veritas, John Miller, The Office, L. Murg, Michael Jeffery, The Kells Show, Maid Research, Andrew Herrera, Terry Prospery, XRP Carolina, whatever A.E. And Hero Soap Company, they make soap. So that's it for today. And also, if you get an email from Dan Digital Asset New at Gmail, that's a scammer, my email is Dan Digital Asset News with an S at Gmail. This guy, or gal, I don't know who it is. They want you to join some kind of trading group.  But that's it. So again, thanks for sticking with me. Appreciate it. Have a great day. See you on the next one. And that's all.


Personal Finance PowerPoint Presentation Price to Earnings or PE Ratio. Prepare to get financially fit by practicing personal finance. Most of this information comes from Investopedia Price to Earnings PE Ratio, which you can find online. Take a look at the references, resources, continue your research from there. This by Jason Fernando. Update of July 14, 2022 in prior presentations. We've been taking a look at investment goals, investment strategies, investment tools, keeping in mind the two major categories of investments. That being fixed income, typically bonds, and the equities, typically the common stock. We're focused more here on the equity side of things. Also, keep in mind your investment tools and strategies. For example, if investing for retirement, you may be using tools such as mutual funds, such as ETFs, where you're pooling the money together in an attempt to diversify, possibly in these cases, not focusing so much on individual stocks, but sectors possibly looking more at indexes, for example. If you're trading individual stocks, then you're going to be wanting to drill down on those financial statements, doing some ratio analysis, and the price earnings ratio is one of the key components to be looking at. So what is the price earnings PE ratio? The price to earnings ratio is the ratio for valuing a company that measures its current share price relative to its earnings per share, the EPS. The price to earnings ratio is also sometimes known as the price multiple or the earnings multiple. So these ratios, of course, are going to be quite important when we want to be comparing things. Remember that this is applicable for many different areas, and your job performance, for example, you're probably going to run into situations where people are going to have to use some ratio analysis to see how well you're doing. And if we measure job performance of, say, athletes, for example, this is often what we are doing, helps us to do some comparisons in ways that we couldn't do without the ratios. So the PE ratios are used by investors and analysts to determine the relative value of a company's shares in an apples to apple comparison. So we want to be breaking things down so we can be comparing across different companies, looking at value, trying to determine if the price is appropriate and so on for our investment decisions. And we need to do so such a way that we have the same thing compared to the same thing, apples to apples, as they say. It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time. So we can compare it to other companies, markets or industries in general or to our own past history to look at the performance of the company itself over time. PE may be estimated on a trailing, backward looking or forward projected basis. So we might look at the actual data that has actually happened or we might try to say, hey, look, I want to make a decision at the margin at this point in time because I'm using it for future decision making purposes. So maybe I'll try to have a forward projection to calculate it. The PE ratio formula and calculation, the formula and calculation used for this process are as follows. The PE ratio market value per share, that's going to be the share price determined by the market, not by the company market supply and demand. Divided by the earnings per share. So we talked about calculating the earnings per share and prior presentations. Once we have the earnings per share, oftentimes the next step will be calculating the PE. So to determine the PE value, one must simply divide the current stock price by the earnings per share. So the current stock price, PE, can be found simply by plugging a stock ticker symbol into any finance website. And although this concrete value reflects that investors most currently pay for a stock, the earnings per share is a slightly more nebulous figure. So the stock price is determined by the stock market. And remember that the stocks are uniform in nature. So it's corporation separate legal entity breaking out ownership into equal units of stock, which are typically traded on the exchange because we're usually talking about publicly traded companies here. And so therefore, if another stock is trading, that's the same as this stock and it's got no differences, we can use the market to help determine what the price is. So that is a great, great tool. So earnings per share comes in two main varieties. TTM is a Wall Street acronym for trailing 12 months. This number signals the company's performance over the past 12 months. The second type of earnings per share is found in a company's earnings release, which often provides earnings per share guidance. This is the company's best educated guess of what it expects to earn in the future. Now notice the past earning per share data is kind of reliable in that it's based on actual data, the past history, what has actually happened. But again, what we're trying to do is kind of look toward the future oftentimes. So we might try to say I'd rather have a projection that's looking forward going from this point that might be more useful for my current time frame. But obviously we don't know exactly what the future is at this point. So this different version of earnings per share form the basis of a trailing and forward PE respectively. So understanding the PE ratio, price earnings ratio, the price to earnings ratio PE is one of the most widely used tools by which investors and analysts determine a stock's relative valuation. So it's a really important ratio. The PE ratio helps one determine whether a stock is overvalued or undervalued. That's the key of the game. By low sell high, that's my investment strategy and advice. A company's PE can also be benchmark against other stocks in the same industry or against a broader market such as the S&P 500. So we can be of course doing some comparisons with the PE ratio to other stocks and industries. And that's part of the point. Sometimes analysts are interested in long term valuation trends and consider the PE 10 or PE 30 measures which averaged the past 10 or 30 years of earnings respectively. These measures are often used when trying to gauge the overall value of a stock index such as the S&P 500 because these long term measures can compensate for changes in the business cycle. So in that case we're trying to get a better grasp of basically the long term trend and obviously within each sector there's cycles, within cycles, within cycles, right? There's going to be good times and bad times for particular companies, for particular sectors and so on for particular reasons. So the PE ratio of the S&P 500 has fluctuated from a low of around 5X in 1917 to over 120X in 2009 right before the financial crisis. The long term average PE for the S&P 500 is around 16X meaning that the stocks that make up the index collectively command a premium 16 times greater than their weighted average earnings. So the forward price to earnings. These two types of EPS earnings per share metrics factor into the most common types of PE ratios. We've got the forward PE and the trailing PE. A third and less common variation uses the sum of the last two actual quarters and estimates of the next two quarters. So we can kind of use a hybrid of the past two quarters and then try to figure out what we think is going to happen in the next two quarters with regards to the earnings side of things. So the forward or leading PE uses future earnings guidance rather than trailing figures, sometime called estimated price to earnings. This forward looking indicator is useful for comparing current earnings to future earnings and helps provide a clearer picture of what earnings will look like without changes and other accounting adjustments. However, there are inherent problems with the forward PE metric, namely companies could underestimate earnings in order to beat the estimated PE when the next quarters earnings are announced. Other companies may overstate the estimate and later adjust it going into their next earnings announcement. So in other words, whenever we're trying to figure out or think about what the revenue of a company is going to be in the future, that's going to be a difficult thing to do. And we can be dependent on management to some degree because they're going to try to give us an accurate number to some degree. But we can see the incentives that are given when you have projections by management out into the future because one objective is they don't want to miss their target because that's going to look bad if they say they're going to do something and then they miss it. So they might fudge the number or make a low ball estimate so they can clear the hurdle easily, making them look good. So that's one strategy that could be used. On the other hand, they don't really like also having low estimates. So you can imagine situations when they're trying to appear strong by overestimating the estimate possibly to generate value to get a bump in valuation and hoping that kind of sparks a spiral of a positive virtuous cycle. But in any case, furthermore, external analysis analysts may also provide estimates which may diverge from a company estimates created confusion. So you might have outside analysts saying, yeah, this is what I think about it based on the information I have. And now you've got to think, okay, who has the most accurate information about their predictions of the future? So note that these tools that we're using, they're all estimates. They're all tools. So we're trying to paint a picture with basically statistical tools as opposed to this is a hard line rule. And this is kind of difficult for people that learn accounting oftentimes because you try to say, well, there's going to be a hard line rule. This is the way you do it. This is what it is. But when you're looking at statistics and trying to predict what's happening in the future, really you want to gather as much data as you can possibly looking at it from multiple angles. So that you can then put together your best assumptions of what's going to happen. So we've got the trailing price to earnings. The trailing PE relies on past performance by dividing the current share price by the total earnings per share earnings over the past 12 months. It's the most popular PE metric because it's the most objective assuming the company reporting earnings accurately. So clearly if we take the past earnings, then at least those are accurate for the timeframe. We would like to have accurate future numbers, but we don't know what those are, right? So we might just use the actual last numbers because that's what actually happened unless they lied on hopefully we can depend on the financial statements. Some investors prefer to look at the trailing PE because they don't trust another individual's earnings estimate. So you're going to say, hey, look, that's great, even if it's management, but you're a little bit biased by telling me what you think is going to happen in the future. I'll just look at what happened in the past because I can have a little bit more confidence in that and then make my own estimates. But the trailing PE also has its share of shortcomings, namely that a company's past performance doesn't signal future behavior. So in other words, past performance may give you some indications of the trends and what's going on and so forth. But if things are changing rapidly, then it may not reflect what's happening. There could be substantial changes, but of course, nobody knows what exactly the effect of those substantial changes are going to happen in the future, even management until the future becomes the present. But in any case, investors should thus commit money based on future earnings power, not the past. The fact that the earnings per share number remains constant while the stock price fluctuates is also a problem. If a major company event drives the stock price significantly higher or lower, the trailing PE will be less reflective of those changes. The trailing PE ratio will change as the price of the company's stock moves because earnings are only released each quarter while stock trades day in and day out as a result. Some investors prefer the forward PE. So if the forward PE ratio is lower than the trailing PE ratio, it means analysts are expecting earnings to increase. If the forward PE is higher than the current PE, analysts expect them to decrease. So let's think about that real quick here. If we're taking our PE ratio that we're considering and we're thinking that the forward earnings here are going to be higher than they were in the prior earnings, that would mean that the forward PE would have a higher denominator, which would make the total PE go down. On the other hand, if the earnings that we're expecting in the future, the forward earnings, the future perspective earnings are expected to be lower, that would mean the denominator would be decreased and that would mean that the future PE or the forward PE would be higher in that instance. Okay, valuation from PE. Valuation from PE, the price to earnings ratio or PE is one of the most widely used stock analysis tools by which investors and analysts determine stock valuation. In addition to showing whether a company stock price is overvalued or undervalued, the PE can review how a stock's valuation compares to its industry group or a benchmark like the S&P 500. In essence, the price to earnings ratio indicates the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company's earnings. So this is why the PE is sometimes referred to as the price multiple because it shows how much investors are willing to pay per dollar of earnings. If a company was currently trading at a PE multiple of 20X, the interpretation is that an investor is willing to pay $20 for one dollar of earnings. So in other words, if we put $20 for an investment, we of course are hoping for a return in the future. The return in the future will be dependent on the company generating revenue, but although the company is generating revenue, we may not get that revenue back in the form of just cash in the form of a dividend. So in other words, if we put the $20 down, we expect to get a return in the future either in the form of a dividend or possibly in the form of the company reinvesting the earnings that they have into something like equipment, for example, which they're going to use to generate more revenue in the future, which should increase the value of the stock price. So if we're investing $20 and we're comparing that to the earnings of the company, the earnings of the company will ultimately hopefully be the thing generating value for us to return for us in some way, shape or form into the future. Also note that this $1 return is representing basically a year, the return in a year because we're looking at an income statement over a year's time frame, for example. Okay, so the PE ratio helps investors determine the market value of a stock as compared to the company's earnings. In short, the PE price earnings ratio shows what the market is willing to pay today for a stock based on its past or future earnings. A high PE could mean that a stock's price is high relative to earnings and possibly overvalued. So if we look at the PE ratio, we've got the price up top, which is determined by the market, and then the earnings. If we've got a high PE ratio, that means that the price is quite high relative to the earnings. So the price is multiples of the earnings. So if we've got a lower PE ratio, then you'd think the better valuation all else basically equal because it's closer to basically the earnings. And of course, this PE ratio is something that you would need to then be comparing to other stocks within the sector and other indexes and so on and so forth to determine if you think the price is properly valued. That would be one of the major tools. So conversely, a low PE might indicate that the current stock price is low relative to earnings. So example of a PE ratio. As a historical example, let's calculate the PE ratio for Wal-Mart WMT as of February 3rd, 2021 when the company stock price closed at $139.55. The company's earnings per share for the fiscal year ending January 31st, 2021 was $4.75 according to the Wall Street Journal. Therefore, the PE ratio is going to be the $135.55 divided by the 4.75, which gives us 29.38, comparing companies using PE. So as an additional example, we can look at two financial companies to compare their PE ratios and see which is relatively over or undervalued. Obviously, all this stuff is kind of relative because we're trying to use these tools to compare them to where we should be investing. So we need to be comparing them in comparison to other companies in their sector and so on and so forth to indexes and whatnot. So Bank of America Corporation BAC closed out the year 2020 with the following stats. Stock price $30.31, diluted earnings per share $1.87, PE equals 16.21, which is the $30.31 divided by the 1.87 to get to the PE of the 16.21. In other words, Bank of America traded at roughly 6x, 6 times. So you can see, of course, if this is the price here, 30, and the earnings are going to be the 1.87 for the diluted earnings per share, then the price is 16 times, a little bit over 16 times the earnings per share. So in other words, Bank of America trades at roughly 6x, 6 times trailing earnings. However, the 16.21 price earnings multiple by itself isn't helpful unless you have something to compare it with such a stocks industry group. So clearly, again, everything is kind of relative here because we're trying to choose which would be the most valuable investment. So that's a benchmark index or Bank of America's historical PE ratio. So Bank of America's PE at 16x was slightly higher than the S&P 500. So now we're looking at one of the major indexes, the S&P 500, to see if they're kind of in the average. So which overtime trades at about 15x trailing earnings? To compare Bank of America's PE to a peers, we can calculate the PE for JP Morgan Chase and company, JPM, as of the end of 2020 as well. We got the stock price $127.07 diluted earnings per share, $8.88. Therefore, the PE is going to be 14.31x. So when you compare Bank of America PE of 16 to JP Morgan's PE of roughly 14x, Bank of America stock does not appear as overvalued as it did when compared with the average PE of 15 for the S&P 500. So Bank of America's high PE ratio might mean investors expect higher earnings growth in the future compared to JP Morgan and the overall market. So Bank of America is outside of course here, so they've got a higher price compared to what the earnings would be. So you would think, okay, why would that be the case? Can I explain that case or is the market basically overvaluing Bank of America? Or is there some underlying condition that can basically explain why that would be the case? However, no single ratio can tell you all you need to know about a stock. So clearly this is one of the biggest ratios that we're going to be using when we do comparisons, but there's no one number that can do it because we're using statistics to predict the future. And therefore we're trying to use a bunch of different tools to get a picture of what the future could be. And we have to do that by looking at multiple angles, for example. So before investing, it is wise to use a variety of financial ratios to determine whether a stock is fairly valued and whether a company's financial health justifies its stock valuation. Investor expectations in general, a high PE suggests that investors are expecting higher earnings growth in the future compared to companies with a lower PE. A low PE can indicate either that a company may currently be undervalued or that a company is doing exceptionally well relative to its past trends. So you could look, again, you could look either way at a high or low PE. You could say, the key is to say, OK, if something is outside the range, why is it outside the range? Why is it higher? Is it justified to be higher? Or if it's lower, you might say, well, that could be that this particular stock is undervalued, or it could be some other reason that the stock is weaker for some reason, some other reason. So you want to get the trends, get the calculation and then try to explain or try to think about why the ratio is what it is. And you might be looking at the overall market trends and so on saying, well, if people are anticipating an upturn or downturn in the market, where are they putting their money? Possibly they're over putting their money in safe places or something like that. And you can get into different trends in terms of psychology of the market psychology and why money might be going one place or another place, for example. So when a company has no earnings or is posting losses in both cases, the PE will be expressed as NA, though it is possible to calculate a negative PE. This is not the common convention. So the price to earnings ratio can also be seen as a means of standardizing the value of $1 of earnings throughout the stock market. So in theory, by taking the median of PE ratios over a period of several years, one could formulate something of a standardized PE ratio, which could then be seen as a benchmark and used to indicate whether or not a stock is worth buying. PE versus earnings yield, the inverse of the PE ratio is the earnings yield, which can be thought of as the E over the P. So now we've got the E divided by P earnings divided by the price. So the earnings yield is thus defined as EPS earnings per share divided by the stock price expressed as a percent. So if stock A is trading $10 and its earnings per share for the past year was 50 cents, TTM, it has a PE of 20, i.e. 10 divided by 50 cents, and an earnings yield of 5, that's the 50 cents divided by the 10. If the stock B is trading at $20 and its EPS earnings per share was $2, it has a PE of 10, i.e. 20 divided by 2, and an earnings yield of 10%, which is the 2 divided by the 20. The earnings yield as an investment valuation metric is not as widely used as the PE ratio. Earnings yield can be useful when concerned about the rate of return on an investment. For equity investors, however, earnings periodic investment income may be secondary to growing their investment values over time. In other words, when we look at the earnings yield for a year, that could be often a tool that we're looking at when we're comparing different yields, how much we're earning, but if we're only looking at one year out, the earnings for one year out, that's oftentimes shorter than our investment horizon because we're trying to think about what the investment is going to be longer. We might be more long focused than one year. This is why investors may refer to value-based investment metrics such as the PE ratio more often than earnings yield when making stock investments. The earnings yield is also useful in producing a metric when a company has a zero or negative earnings because such a case is common among high-tech, high-growth or startup companies, earnings per share will be negative producing an undefined PE ratio denoted in A. If a company has negative earnings, however, it will produce a negative earnings yield which can be interpreted and used for comparison. If there's negative earnings, then we're going to have an issue with the earnings per share, but we might still be able to calculate the earnings yield. So the PE versus the PEG ratio, the PE ratio, even one calculated using a forward earnings estimate, doesn't always tell you whether the PE is appropriate for the company's forecasted growth rate. So to address the limitation, investors turn to another ratio called the PEG ratio. A variation on the forward PE ratio is the price earnings to growth ratio or PEG. The PEG ratio measures the relationship between the price earnings ratio and earnings growth to provide investors with a more complete story when the PE can on its own. So in other words, the PEG ratio allows investors to calculate whether a stock's price is overvalued or undervalued by analyzing both today's earnings and the expected growth rate for the company in the future. So we're trying to take into account that future information again, making a decision on the margin at this point of time. The PEG ratio is calculated as a company's trailing price to earnings PE ratio divided by the growth rate of its earnings for a specified time period. The PEG ratios is used to determine a stock's value based on trailing earnings while also taking the company's future earnings growth into account and is considered to provide a more complete picture than the PE ratio can. For example, a low PE ratio may suggest that a company is undervalued and therefore should be bought, but factoring in the company's growth rate to get its PEG ratio can tell a different story. The PEG ratio can be termed trailing if using historic growth rates or forward if using projected growth rates. Although earnings growth rates can vary among different sectors, a stock with a PEG of less than one is typically considered undervalued because of its price is considered low compared to the company's expected earnings growth. A PEG greater than one might be considered overvalued because it might indicate the stock price is too high compared to the company's expected earnings growth. Absolute versus relative PE price earnings analysts may also make a distinction between absolute PE and relative PE ratios in their analysis. Absolute PE. The numerator of this ratio is usually the current stock price and the denominator may be the trailing earnings per share, the estimated earnings per share for the next 12 months, forward PE, or a mix of the trailing earnings per share of the last two quarters and the forward PE for the next two quarters. When distinguishing absolute PE from relative PE, it is important to remember that the absolute PE represents the PE of the current time period. For example, if the price of the stock today is 100, the TTM earnings are $2 per share, the PE is 50, which is 100 divided by the two. Relative PE. The relative PE compares the current absolute PE to a benchmark or a range of past PE's over a relevant time period such as the past 10 years. The relative PE shows what portion of a percentage of the past PE's the current PE has reached. The relative PE usually compares the current PE value to the highest value of the range, but investors might also compare the current PE to the bottom side of the range measuring how close the current PE is to the historic low. The relative PE will have a value below 100% if the current PE is lower than the past value, whether the past high or low. If the relative PE measures is 100% or more, this tells investors that the current PE has reached or surpassed the past value. Limitations on using the PE ratio, like any other fundamental design to inform investors as to whether or not a stock is worth buying, the price to earnings ratio comes with a few limitations that are important to take into account because investors may often be led to believe that there is one single metric that will complete insight into investment decisions so no one metric can do it all. Companies that aren't profitable and consequently have no earnings or negative earnings per share pose a challenge when it comes to calculating their PE. Operations vary as to how to deal with this. Some say there is a negative PE, others assign a PE of zero, while most just say the PE doesn't exist in a in other words, or is not interpretable until a company becomes profitable or purposes of comparison so obviously if there's negative profits, that's a problem for the PE ratio. A primary limitation of using PE ratios emerges when comparing the PE ratio of different companies, valuations and growth rates of companies may often vary widely between sectors due to both the different ways companies earn money and the different timelines during which companies earn that money. So when we're trying to make projections into the future, that could be difficult when we're looking at different companies, different sectors and so on. As such, one should only use PE as a comparative tool when considering companies in the same sector because this kind of comparison is the only kind that will yield productive insight. Comparing the PE ratios of a telecommunications company and an energy company for example may lead one to believe that one is clearly the superior investment but this is not a reliable assumption. Other PE considerations, an individual company's PE ratio is much more meaningful when taken alongside the PE ratio of other companies within the same sector. For example, an energy company may have a high PE ratio but this may reflect a trend within the sector rather than one merely within the individual company. An individual company's high PE ratio for example would be less cause for concern when the entire sector has high ratios. So if you see a high ratio of course you want to see it in alignment or conjunction with the other companies in that area. Moreover, because a company's debt can affect both the prices of shares and the company's earnings, leverage can skew PE ratios as well. For example, suppose there are two similar companies that differ primarily in the amount of debt they assume. The one with more debt will likely have a lower PE value than the one with less debt. However, if business is good the one with more debt stands to see higher earnings because of the risk it has taken. So leverage can have interesting impacts, right? If you're highly leveraged you're taking on more risk but you might have more access to the upside but then of course if things go down there's more risk involved. So you want to take into consideration leverage which you might talk more about in the future. Another important limitation of price earnings ratio is one that lies within the formula for calculating PE itself. Accurate and unbiased presentations of PE ratios rely on accurate inputs of the market value of shares and of accurate earnings per share estimates. The market determines the prices of shares through a continuous auction. The printed prices are available from a wide variety of reliable sources. However, the source of earnings information is ultimately the company itself. The single source of data is more easily manipulated so analysts and investors place trust in the company's offers to provide accurate information. So we have to trust the financials. If that trust is perceived to be broken the stock will be considered riskier and therefore less valuable. The fact that they're on an exchange and they're audited hopefully gives us more confidence that the information they're providing us is accurate. To reduce the risk of inaccurate information, PE ratio is but one measurement that analysts scrutinize. If the company were to intentionally manipulate the numbers to look better and thus deceive investors they would have to work strenuously to be certain that all metrics were manipulated in a coherent manner which is difficult to do. That's why the PE ratio continues to be one of the most centrally referenced points of data when analyzing a company but by no means it's only one. What is a good price earnings ratio? The question of what is a good or bad price earnings ratio will necessarily depend on the industry in which the company is operating. Some industries will have higher average price to earnings ratios while others will have lower. For example, in January 2021 publicly traded broadcasting companies had an average trailing PE ratio of only about 12 compared to more than 60 for software companies. If you want to get a general idea of whether a particular PE ratio is high or low you can compare it to the average PE of the competitors within the industry. Is it better to have a higher or lower PE ratio? Many investors will say that it is better to buy shares in companies with a lower PE ratio because this means you are paying less for every dollar of earnings that you receive. That would be the general idea that you would think, right? In that sense a lower PE is like a lower price tag making it attractive to investors looking for a bargain. In practice however it is important to understand the reason behind the company's PE. So what you really want to do is get the differences and try to say why and explain the why's of the ratios and that's really what should be leading you to your investment decisions. More than just a rule of thumb kind of thing that's based on one thing, right? So for example, I mean it's too simplified in other words just to say well it's more value because the PE ratio. For instance, if a company has a low PE because its business model is fundamentally in decline then the apparent bargain might be an illusion. So what does a PE ratio of 15 mean? Simply put a PE ratio of 15 would mean that the current market value of the company is equal to 15 times its annual earnings. Put literally if you were to hypothetically buy 100% of the company share and it would take 15 years for you to earn back your initial investment through the company's ongoing profits assuming the company never grew in the future. Why is the PE ratio important? The PE ratio helps investors determine whether the stock of a company is overvalued or undervalued compared to its earnings. The ratio is a measurement of what the market is willing to pay for the current operations as well as the prospective growth of the company. If a company is trading at a high PE the market thinks highly of its growth potential and is willing to potentially overspend today based on future earnings.


QuickBooks Desktop 2023 Enter transaction purchase of inventory using bank feeds overview. Let's do it within two weeks. QuickBooks Desktop 2023 Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop Bank Feed practice file. We started up in a prior presentation going through the setup process. We do every time maximizing the homepage to the gray area view drop down hide icon bar open windows list checked off open windows open on the left reports drop down company and financial. Let's open up that profit and loss P&L changing the range from 010122 to 123122. Then I'm going to customize it and go to the fonts and numbers because I like it to be changed a little bit larger to 14. Okay. Yes and okay. Once again reports drop down company and financial but this time the balance sheet standard. I'm going to change the range by going to the customizing of the reports from 010122 to 123122 and then go to the fonts and numbers changing the font to match the P to the L to the 14. Oh yes. Okay. There we go. That's the setup process there. Now I'm going to be opening up the bank feeds by going to the banking drop down bank feeds and we got the bank feed center which is only there if you got the bank feed setup which we did in a prior presentation. It un-maximizes stuff which is annoying so I'll just maximize it. Remax, re-maximize and there we have it. So now we want to talk about inventory. Inventory being one of those things that often adds to a level of complexity making it more difficult to just enter the transactions directly from the bank feeds. So let's first give an overview of why that is and then we'll go through the most easy kind of transaction first and then build on some more complexity related to inventory. So let's go back to the homepage here and just imagine the flow with regards to inventory. So if we're purchasing inventory and selling inventory we could track the inventory either on a periodic basis or a perpetual basis. So if we're tracking the inventory on a periodic basis then possibly we don't even need to turn inventory on within QuickBooks because we're not going to have a sub ledger tying out to the inventory account in that case. But instead, possibly do our own sub ledger outside of QuickBooks in other software or possibly just on a spreadsheet program Google Sheets or Excel for example. And what we would do in that kind of scenario is we would simply when we purchase the inventory record it within our bank feeds and we can use the bank feeds then to do that to an inventory account increasing inventory every time we do a transaction allowing us to automate the system. And then we'd have to do a periodic transaction at the end of the day, at the end of the week, at the end of the month. And we would determine what that transaction would be by counting the inventory that we still have on hand and doing our cost of goods sold calculation beginning inventory plus purchases minus the ending inventory to determine how much inventory we sold in theory. And that would be the cost of goods sold. So then we would have to periodically that's why it's the periodic system lower the inventory and record the cost of goods sold. And we would do we would use like a just a journal entry to do that kind of transaction. So that would be an added step that we would have to put in place and track the inventory outside the system and do a periodic entry. Now, we could do something even easier than that. We could say and this would only work in certain cases and you want to really run this by when you have inventory, your tax preparer. If you have someone giving you some advice on how to set this up in terms of what's best for bookkeeping what will be needed at the end of the year for things like reporting purposes and tax preparation. But in some cases you might say, hey, look, why don't I just not even deviate from a cash based system. And when I buy the inventory, I'm just going to expense it at the point when I buy it. So I'll just expense it at that point in time to possibly cost of goods sold. And then when I sell the inventory, I'll just record the income when I when I sell it. And the reason that's a little bit wonky or a little weird is because you're still on a cash based system that time. But when you buy the inventory, you're expensing it when you purchased it in the form of possibly cost of goods sold. But that will result in an expense that's usually on an accrual basis tied to when you sold the inventory. So you would think you would have inventory related to it. But no, you got you put you put the expense on there first and then later when you get the income, then you're going to record the income when you receive the income. So it's just a timing difference. If you were to do that because you still have the income and the cost of goods sold, you're just recording them not exactly in the same same period, which which is a timing difference. The timing difference is being why we need an accrual basis. So if you were in a system, for example, where you do work for someone and you and you do something that is going to be customized for your customers and you buy inventory that you're then going to use specifically for that customer, then maybe the easiest thing to do is just expense the inventory as you purchase it because you're not holding on to a lot of inventory and then just basically record the income when you make the sale. But if you're in a situation where you're buying a lot of inventory and then you're holding on to inventory, that becomes something that's not as effective because now you have a situation where you're not really using the inventory to generate revenue until later. So that matching concept between recording the expense and the and the income gets kind of messed up. Also note that if you are doing taxes inventory in some cases are an area where you're forced to kind of go on to an accrual basis. So you want to keep that in mind as well. And then the third method you can use is of course the full accrual accounting system, which would be indicated to be turned on by the vendor item up here. This would be a perpetual accrual accounting system. And then I can go to the edit dropdown preferences and you can see here that in the items and inventory we turned on the inventory right here. So that if turned on will result typically in the homepage having this top track and that will indicate that you have a perpetual inventory at least turned on. And in that case it really complex makes it more complex to use the bank feeds to just generate your financial statements because you can't just rely on the bank feed forms. Remember that the bank feeds are increases or decreases to the checking account. So usually a decrease to the checking account the bank feed decrease when you buy inventory would be a check type of form. And usually the when you have an increase it's going to be a deposit type of form inventory is going to have an impact on both the vendor cycle the payments as well as the customer cycle the receipts the sales to the customers the inflows of cash. So when you pay for inventory you might still be able to pay it with basically simply a check type of form. But the check it's going to be more complex because you're going to have to check assign the check form rather than to an expense account an item type of account here. Because the items are going to be the things that are going to allow QuickBooks then to track the sub ledger not just by account that it's going to inventory and dollar amount but also by units that you will have on the sub ledger. So these items become quite important and how you can get those items recorded becomes important. You can set the items up as we might discuss a little bit in more detail later by going to the list drop down and items list. And then these are going to be your items you hit the drop down or rise up new item you got service items and inventory items that we can set up here as we have the items then we got to use the proper forms in order to input the items. Closing this and closing this you also might have a purchase order situation in some cases which also adds a level of complexity because that's a non cash transaction that we have to track that's not going to go through the bank feeds. You might enter a bill form connecting to the purchase form which again is an accrual form increasing accounts payable and therefore you're going to have to think about how the bank feeds would fit into that kind of transaction. Before you finally pay it which would be a bank feed transaction with a check type of form or a pay bill form. So we'll talk more about that in the future but then just to touch on the other side of the inventory when we sell the inventory. We were not going to be able to record just a deposit if we're tracking the inventory within the quick book system because the deposit form is not designed to account for the sub ledger the forms that are designed for a sales transaction even on a cash basis would be the invoice and the sales receipts. These two forms have the the item list the item thing is what you need in order to track the sub ledger. So if you have perpetual inventory system you got to think about how are the bank feeds going to fit into my perpetual inventory system that's going to add a level of complexity. So also just realize that you're going to have sale you might have sales tax which in the United States is applied to the inventory often on the state and local level and the sales tax items when they're set up can be set up and usually are driven by the sales forms again not by the deposit form the deposit forms not going to allow you to automatically calculate the sales tax. There are workarounds to that and we might we might talk about it meaning for example you might just if you want to keep on a cash basis and you're selling stuff or use a periodic system. You might just say hey look my sales price includes sales tax and so that you can manually calculate the sales tax that way without using the automated sales tax calculation. That QuickBooks is doing and then still record your revenue with a deposit so we might talk more about that in the future but first let's first think about the purchasing side of things and let's imagine the easiest method. Let's imagine we're not going to deviate from a cash based system because I'm just buying inventory and then turning around and selling it immediately. If I'm not holding on to it too long maybe I can just expense it as I purchase it that would be the easiest thing to do again talk to your accountant in terms of what would be best for you. But and then we'll get into more complex transactions just to touch on a few of them. So let's go back to the bank feeds right here and let's choose a transaction. So I'm going to go back to the uncategorized. Let's pick one of these like Primerica one. I'm going to hit this one. So let's pick this one. Well let's do this one. Let's just say that we're doing this one here and I'm going to say OK we're going to we're going to purchase this for so I'm going to say let's say it's purchased from just like we have done in the past. Primerica which I'm just pulling from this data. We're just imagining that this is someone more purchasing inventory from that we're going to turn around and sell immediately to a customer. I'm going to say tab quick setup. So we'll do a quick setup on it. It's a vendor so we'll keep that OK. And then the account that it's going to go to. I'm not going to put it to inventory which would be what we would normally do to track inventory but instead try to stay in a cash based system. And record it to cost of goods sold which is a special expense type of account. So I'm going to go to cost of goods sold. I don't have a cost of goods sold yet. If you chose an industry that deals with inventory then the system would probably have given you a cost of goods sold. I'm going to set hours up as we go by adding a new account. It's not really an expense account although it's in it's a type of expense account a special one cost of goods sold will be the type. I'm just going to give it the same name here cost of goods sold boom. That's all we need. And some you just know you could get more complex with cost of goods sold like you might have categories. So you might make a parent account of cost of goods sold and then other subcategories of types of cost of goods sold in certain cases possibly. But I'm just going to keep just cost of goods sold and say OK. And then I'm going to go to the drop down here add more details just so we can see it in this format. So we've got this information up top. We've got the date. We've got the memo. We've got the number there's we added that we added the cost of goods sold account the memo billable item. And you could we won't get into the billable items but just note that you've got that option to have it billable so that you could then pull this over. Generate the invoice from it. So you got to be careful with that billable item. However because you want to make sure that it's pulling over to the proper income account. So we've got some prior court in the prior courses or prior sections. We've we talked more about the pros and cons of that billable item and how you might use it depending on your system. But that's that. Now we could create a rule for it but I'm not going to do that right now because I'm just using this as a practice. If this was the system that we were going to use every time then I can create a rule just always making my inventory go to cost of goods sold when I purchase it which would be the fastest thing to do. So I'm going to close this out and then I'm just going to add it to the register and let's just see what happens. We can see in the register now we've got this $30 item here if I then go to the it's not recognized because I didn't add it there. Let's go to the balance sheet double clicking the checking account. We still have a check type of form recording this item which went to cost of goods sold double clicking on it still a check type form. Notice this tab says expenses which is a little deceiving. What we didn't do is put it to the items tab items typically refers to inventory items so it would be a purchase of inventory items. But we're not going to put it there because I don't want to track the sub ledger of inventory items because that adds a level of complexity. We'll talk more about them later. Instead we put them over here and notice that cost of goods sold is a kind of expense so it still kind of fits in the term. But if I was to put it to inventory I would still use I could still use this item for inventory or fixed assets. So that that categorization names a little bit complex really this is an account you're going to that's not impacting like a like a sub ledger like inventory. So in any case I'm going to close this back out close this out instead of the other side going to inventory an asset which would add more complexity because then I would have to decrease the inventory when I used it. But with the with the use of a perpetual inventory system which would be when I make a sales receipt or a invoice or I would have to do it periodically lowering it on a periodic basis based on my schedules outside of QuickBooks which I might do nightly weekly monthly. But in this case I just said I'm just going to expense it as I go profit and loss there's the cost of goods sold. Now notice this looks quite funny quite strange because now I've got the cost of goods sold here without any related income to it because usually those things on an accrual system I try to match them in the same time period. However if I bought this thing and I know I'm going to use it for a particular job which I'm going to turn around and and bill for very soon. Then this system that's when this system could work right you might say OK it's a small timing difference if you're holding on to a lot of inventory then it becomes something that's not going to work out too well. So just on the other the next thing that would happen on the revenue side of things now that I've got the inventory is that I might try to stay in a cash based system right and charge the client revenue. If the client gives me money and I wait till it clears the bank and I could record revenue with just a deposit form and record the other side to income. Then I can stay all on a bank feed even on the revenue side. However I might have to use an invoice to charge the customer for example which kind of messes me up on the revenue side from using just the bank feed. So we'll talk more about that in the future. So that's the general overview. Just note again that the inventory you really have to kind of think through how you're going to be doing your inventory. If you have sales tax involved you want to make sure that you're thinking about how you're going to calculate the sales tax to on it which and and you want to take into consideration. You know what's the best method for you. Not just you know what QuickBooks does like you could track inventory in QuickBooks but you don't have to. It might you know it depends on what you know how big your company is and how you're going to be running things. So in the case we'll talk more about inventory in the future for now. Let's go to the reports dropdown and let's go to the accounting and taxes and just look at the trial balance. I'll change the date from 01012 due to 123122 and then let's customize it fonts to the numbers changing it up to 14. Let's go to 16. Get crazy. And then this is where we stand so far remembering that this is just the balance sheet on top of the income statement for a current for the year that you have up place. Which is nice to be able to see you can see the balance sheet accounts and the income statement accounts in one place drill down on them. Check your numbers. See what's happening as you enter the data into the system into the financial statements without the long financial statements and subtotals. Hopefully I've sold you on the trial balance and now that's it. Talk to you next time.


Live from the San Jose Convention Center, extracting the signal from the noise, it's theCUBE, covering Hadoop Summit 2015, brought to you by headline sponsor Hortonworks, and by EMC, Pivotal, IBM, Pentaho, Teradata, Syncsort, and by Atunity. Now your hosts, John Furrier and George Gilbert. Okay, welcome back everyone. Live in Silicon Valley, day three of Hadoop Summit 2015. This is theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. Joining my co-host, George Gilbert, big data analyst at wikibond.com. Our next guest, John Finnelli, VP of Marketing at Data Touring. Welcome to theCUBE. Thanks, thanks for having me. Great to see you. First time on theCUBE. We've known each other for a couple of years now, and formerly Citrix, now VP of Marketing at Data Touring. Great to see you, Industry Vet. Talk about Data Touring. Because obviously streaming's huge. You guys are in that business. Spark is like the prom queen. Everyone loves Spark. Half-baked, people still using it. Got some traction, Hadoop certainly shown the way. The big data, storing it, but getting the extraction of the data is key. So tell us about BitTouring. I mean, DataTouring, DataTouring. Not that we can use a BitTouring, well, of course we all use. Get our free musics and downloads. Sure, so at DataTouring, our product is DataTouring RTS, and it's a unified engine for doing both stream and batch processing. And as you know, one of the key issues is trying to get value out of Hadoop. And what we do is we help customers and companies get reduced the time to insight, and to automate and take actions once they have those insights. So it's really about being operational and either driving greater revenue or greater operational efficiency. So I got this little prop here. Lego blocks, which is great, whoops. That's not the piece. Explain the product strategy, just timetable, shipping, versions, and then how you guys fit in the growing ecosystems for analytics. We call FastData, and obviously Spark is certainly out there. It's in the streaming kind of area. Sure, so DataTouring shipped to version 1.0 last June at Hadoop Summit. We shipped 2.0 in January, and then 3.0, which we announced on Friday, will ship in July. And what we provide is a full suite that allows an entire enterprise to take a benefit from Hadoop. So we have a number of tools for the developer, also for the operations person, the data scientist, as well as the end user. As you mentioned, Spark is pretty interesting. There's a lot of hype around Spark, previously a lot of hype around Storm. And both of these technologies are interesting and they serve certain use cases, but they're not really enterprise grade. And our focus has been to have an enterprise grade product. And so to us, that means fault tolerance, ease of use, performance, tied into enterprise infrastructure, role-based access, LDAP integration, et cetera. And as part of our announcement, we announced that the core engine of DataTouring RTS is open source as part of DataTouring. RTS real time streaming? Not all the time, because as I said, customers are now using us for batch. I'd like to think of it as like, RTS stands for? Nothing. It's really like you have the initial at the end of a car, exactly. The GT. Yeah, we just thought it had that image of being fast and sleek, right? It sounds like real time streaming to me. So DataTouring RTS. And the thing that's really interesting is when you compare DataTouring RTS to say Spark streaming, we have a lot of interesting capabilities. So we guarantee no data loss. We're fault tolerant. We guarantee event orders. We also provide at least ones, at most ones and only ones, processing semantics. It's very easy to program. You program in Java. In fact, you could almost think of us as a Java app server for big data. So you don't have to learn Scala. You don't have to think in the MapReduce paradigm. So it's built for the enterprise? Yes. So enterprise has certain features. So explain the business model, because you gave me the quick tutorial before we came on. The open source component is this piece? That's what you just announced? Correct. And this is for your added value on top? Correct. Like most open source offerings, we're very excited that what we open sourced is about 18 months ahead of Spark streaming from a technology perspective. So what we've given to the community is a step function and functionality. And our community edition is based on that open source in the project that's called Project Apex, A-P-E-X. And that community edition is free, unlimited use, go to production, that's fantastic. If you want to buy support for that, we call that the standard edition.  Now, the rest of the pieces are what we delivered for the enterprise. And that's everything from LDAP integration, role-based access support. We have a drag, drop, and launch capability so that a data scientist can build a big data app with no coding. A business analyst can build their own dashboard and get a real-time dashboard just by dragging and dropping. And from an operational perspective. The community showcase will close at 1.30 today. Please be sure to not open the house for the registration. I think the mics are fine. Oh, okay. So from an, sorry, there was an announcement in case you were wondering why I stopped. And so from an operational perspective, we provide a management council that allows you to manage, monitor, restart, troubleshoot. And once you move to streaming, you really require it to be operational, right? We're not just on the side doing analytics and batch that you can rerun. So the business model, is it that all the layers work together, or can I mix and match components? So all the layers work together. We basically have two additions, the community addition, which is the core platform. That's the free one. Correct. And then we have an enterprise addition which includes all the other capabilities. Can you tell us, you were telling me before about some of the customers, tell us sort of the environment they came from, whether it was batch or to what extent they were able to get real-time. And now where they are, and even if some of them, whether they're anonymous or not, doesn't matter. It's the before and after. So our customers are using this, as I mentioned, for both batch and streaming. And the reason they can do that is we've noticed a generic pattern of ingest and archive, transform and normalize, analyze and create custom business logic, alert and take actions, and then you visualize and persist the data. And that data pipeline is the same whether you're in streaming or batch. So a great streaming example is a company that's doing ad serving. So this company has 800 ad servers, it's generating 40 million events per hour, and they are deduping against two billion events, which is two days worth of events, to allow them to do campaign management in real-time and allows them to, in real-time, programmatically change their ad strategy. And so they're using two different pieces of technology as part of the stream. One is deduping real-time, so they know exactly when they met the campaign criteria. And the other is an in-memory OLAP cube. So they now can ask questions like which ads are performing and which ones are not, and then they can change their strategy so that they don't use the non-performing ads. I don't want to geek out, but updating an OLAP cube in memory is not that easy, is it? I mean, generally, those are created in batch mode. Correct, so we will our highly parallelized solution. So again, unlike Spark Streaming, we will auto-scale and we will auto-parallelize. So we'll take advantage of all the resources in the cluster. So you can set an SLA that says I want to do 10,000 events per second or 100 gig per second, and the system will keep track. And if it's not meeting your SLA, it will use yarn to parallelize and run more instances. And so when the cube needs to grow, we will parallelize the computation and do all the pre-computations. So talk about the company's business model, again, in context to what's going on at Hadoop. So you charge, you pay the price to addition, is that recurring license or annual? So when we put pricing in place, we really wanted to be fair to our customers. We're not out to gouge anyone, yet we also wanted to be consistent with the model that you see in Hadoop. So the Hadoop distills, of course, charge support per node. We, because we're a yarn app, we can get much finer granularity. So we actually charge by container. So you might have 100 node Hadoop cluster, and we're only running on three of those nodes, right? So rather than say you got to pay us for all 100 nodes, we actually say on those three nodes, we're running six containers, each of which is, you know, 20. So it's a consumption pricing model, pretty much. Correct. But on an annual basis. And a finer grain. It is. And it's very fair to customers. And so what they do is, before they add new capabilities or new apps, they know when they're doing it in development, the size of the app and how many containers, and they then know what it's going to cost them. So they can do the value add trade off right away. And most Hadoop clusters grow because of the size of the storage. So people add to the cluster because they need more storage. We've never had a customer say, oh, I need more CPU because of data to one. I better put another node in. There's oodles of CPU and oodles of RAM in every cluster that's not being used. So I got to ask you about why you're winning in your opportunity. So with all this stuff going on with the analytics, the cloud coming over the top, pushing more innovation, kind of dev ops is like, been waiting for this market to develop because now you got software development more productive. Where do you guys see that going?  So I would say the number one thing is definitely being able to be operational, to be fault tolerant, to be managed, to be monitored. So once you move into the data center, you have to perform. With one of our large customers that are actually a Fortune 10 customer, we finished the POC and the app was live and they introduced us to the data center guys. And of course they were like, data who? You're not going in our data center. And so we have an operational run book, et cetera. But what they did is they did the infamous lunchtime test. So they have their app running and again, this is the one that has 40 million events per hour. They shut down the cluster gracefully and they went to lunch for two hours to simulate an outage. They then brought the cluster back up and we came back as if we came back from an outage. We processed all the data. We caught up on all the queue data and we tied out exactly with their batch run. At that point, the operations guy said, you can run in our data center. So fault tolerance is number one. And then number two is ease of use. So when we talk to enterprises about Hadoop apps, they tell us that the first big issue is I can't build anything, it's too hard to use. And then if I build it, does anyone care? So a lot of times there's value in the app. And then the last piece, again, the full circle is if I build it and people care about it, can I run it? So those are really the three things we see. So what's your take of the Hadoop ecosystem? You mentioned some of the things that you guys saw that Hadoop's been struggling with just as maturity. What's going on this year? What's your take on the show this year? What's the theme? What's the vibe? Where is it at? We were on the spectrum of evolution. What I've seen a lot is really about trying to make Hadoop valuable. How can we deliver value to customers? So we're not just taking big data jobs or data jobs we had and port them to big data. It's great to do an ETL job and do all these things but that's where the enterprise doesn't see value. So I see a lot of the vendors here. I see a lot of customers that I talk to that are really looking for, if I do this, how can I demonstrate the value to my business user and then how can I again keep it operational? So what's next for you guys with DataTorrent? What's the plan? Got more software, chip, customers to secure. What's the plan? So the plan is again, announced DataTorrent RTS 3.0, open source our core platform. We've released our first set of applications which are horizontal applications for building applications, for doing data visualization and doing data ingestion. We're going to continue to add value and take applications into more spaces. So you're going to see us doing more vertical applications built on the core platform so that the customer has the ability to do right custom apps and get prepackaged applications.  That sounds like a use case I could buy and then they're like, wait a minute, how does that compare to Spark? Because I'm waiting for Spark, should I wait for Spark, should I buy DataTorrent? Yeah, so I don't think you should wait for Spark because you may be waiting longer than you want to. But what we do see is that in an enterprise customer, you have a business problem that you want to solve without having to go off and learn Scala or MapReduce or any of those difficult things. And it can be both streaming and batch. So what we see for many enterprises is that they have that pipeline I talked about and they have multiple products. You have an ETL product, they have a BI product, they have a visualization product and those products are run by different teams and those different teams create their own data silos. And so most of our customers have a very common thing where they might have a long batch process. One customer had a two week batch process that we connected the dots. And again, think of us as a Java app server. We connected the dots and we took their two week batch process down to a 46 minute batch process. So it still doesn't have to be real time streaming.  So speed's the real deal. It's all about speed and performance. Speed to insight and speed to action. Okay, John Finnelli, VP marketing data attorney. Check him out. We're here live at a Duke Summit. This is theCUBE. We'll be right back. Day three, getting wind down. We're going to get kicked out. The union guys going to take down the stage. We're going to go until they pull the chair out from under us. We'll be right back after this short break. Great.


That's great play from Dom Solanke. And then Kelly looks for Solanke again, who tries to take it down. Still got it here, Dom Solanke. And here comes the goalkeeper, Blackmon. That is a penalty! Given away by Blackmon, the keeper, the challenge came in from a defender as well. And as Solanke went crashing to the ground, Bournemouth have won a penalty for the second game in a row, and Junior Stanislas will step forward again. Yeah, I don't think there was any doubt about the penalty. A crucial lead. Here he comes against Jamal. But Blackmon straight down the middle from Stanislas, he is 7 from 7, and it is Roderick Nill, Bournemouth won. It doesn't seem to matter how we play at this moment in town. We've keep finding a lead, and hopefully we can move on from there. Stating him above the stand on the far side, the building's hard to see it. The ball swung in, and Ledappo to the cherry's defenders. Swung in low on the edge of the six-yard box, and a crisp blow to his left-hand side. Swung back into the penalty once more by Roderick. Still might break in there, Ledappo looking for room for a shot. Turns away, round the outside he goes, close one back across goal. Oh, the day's just finished, and Roderick is joining it today, training in Rotherham 2-1, but here's Billing driving down the left-hand side of the box. Here's Rico, Rico's cross in towards Stomaneck. Solanke with the header! The goalkeeper's hand finds the bottom right corner, and the cherry's with almost half an hour to play back on terms at two each.