experiment with calculating profit differently

[stringertheory]

This may only be relevant to any discussions about valuation, but I think it's weird that the most typical valuation approach (a multiple of earnings, or the "bottom line") depends so heavily on how things get arbitrarily get classified in the books. For example, say that an LLC has:

• 100 bazillion dollars in revenue
• 10 equal members and nobody else
• 1 million dollars in expenses other than salary
• each member has a 10 bazillion dollar salary treated as a guaranteed payment
• they share profits equally

They wouldn't be "profitable" — they'd have negative earnings of -1 million dollars because the salaries are treated as expenses. If, instead, they took more modest salaries of 1 bazillion dollars they'd have ~90 bazillion dollars in earnings (of which they'd each take 9 bazillion). The amount each person takes home is the same, but the "profitability" is drastically different.