Determining Value

Let's say that you want to start a business, and you decide to open a restaurant. You go out and buy a building, buy all the kitchen equipment, tables and chairs that you need, buy your supplies and hire your cooks, servers, etc. You advertise and open your doors.

Let's say that:

You spend $500,000 buying the building and the equipment.
In the first year, you spend $250,000 on supplies, food and the payroll for your employees.
At the end of your first year, you add up all of the money you have received from customers and find that your total income is $300,000.