Or they just have a super flush bank account.

And it's worth 100 gold.

These are liabilities.

Remember liabilities plus equities are equal to assets.

A man of wealth has to pay a lot of income tax.

So once again, it's just a loan to someone else.

I'll do that in yellow.

So its assets.

liabilities plus equity.

It should start to make a little bit of intuitive sense

So their equity was actually 20,000 plus the 150,000 that they got from just the increasing asset value if they didn't enter into this transaction.

It doesn't sound like we borrowed money or anything.

And, but it really it got the electricity. It took a long time.

And at the end of the 10 years it's also going to get 1 billion, right?

That assets, A for assets, is equal to

So let's see, I have my assets right here.

liabilities plus equity.

His assets were auctioned off

And what I wrote here is, it has 4 billion of liabilities.

They got 10 million dollars.

All of the assets needed to start the firm, the pizzeria.

Remember, every time it'd issue a loan, like for right here, it issued a 100 gold piece equivalent loan to D and instead of giving D 100 gold pieces from, say, right here, it just created a checking account for D, which later D paid to A and that's why it's labeled A right here. Let me relabel another thing because the gold is a different color just so you see the gold.

But let's just kind of think about a generic balance sheet for a bank.

Malibu Equity and Investments.

That just comes out of the definition of what equity is.

And so that cash ended up here.

So that's the situation we're dealing with.

Phuong, I'm not a rich man but I do have assets.

I don't want to draw this box.

And rich, eh?

let me give you that piece of terminology, it just means net asset value.

So this is the operating profit. This is the money that just comes out of the asset itself.

They'll often say just like a big bucket of, they'll call them level three assets.

We've got our funding.

And we have 23 billion in liabilities.

Mark to model.

They're assets for those people.

Malibu Equity and Investments. Roger Van Zant.

Let's say our assets, if we paid 10 million for these assets, and these assets this is the income statement for 2008 are spitting out 1 million a year, or at least 1 million in this year, our return on asset I wasn't planning on introducing this, but it doesn't hurt to introduce it right now our return on asset, often acronymed ROA, would be well, the numerator is the return, which is 1 million.

liabilities plus equity is equal to assets.

I use 100 gold pieces.

Well we learned what happens.

It's the same plot.

So I'll write that up here.

I won't use the square tool.