I'll do that in yellow.

So the total assets were 5 billion in assets.

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

But there was an underlying support.

The bank is going to be able to fulfill its promise.

That assets, A for assets, is equal to

But we'll do a whole playlist on that.

But our total assets, or the market's perception of the total assets of the company, are essentially what it's willing to pay for the equity plus the liabilities, so the market is saying that Ben's assets, the assets in that company are worth 220,000.

And we have these 4 billion of CDOs.

Another way to think about it is, if the market is paying 12 million per share, what's the market cap of the company?

I shouldn't have crossed it out, let me write it again. 4 billion, the 2.5 is what the market was saying.

And what is required is a combination of physical capital, institutional capital, human capital and security, of course, is critical, but so is information.

It should start to make a little bit of intuitive sense

In the last video I talk about how both Ben's Shoes and Jason' shoes are fundamentally the same business but they have different capital structures.

And then on the equity side, because we have no liability, so in this case assets will be equal to equity.

And if this is worth 2.5 billion, then your total assets are what?

And so this is our yield.

liabilities plus equity.

We know there's a million shares.

In a world without leverage so if I didn't have all this

So this is just another visual representation that

less capital intensive that there's less money that's required

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

Okay. I'm going to ask a few questions, and Google will respond.

But let's say its assets are worth 1 million.

Capitalist country.

They're the share of owner's equity and not of the asset also gives you a good sense of what market cap is

Let's figure it out. It's equity.

One, what shares are share of

You love your heroes.

liabilities plus equity is equal to assets.

I use 100 gold pieces.

And then the equity is, essentially we would look at this formula.

So I'm also solvent.

liabilities.

In return on equity, the numerator is the net income that we got, so it's 350,000.

like an equation, but it's assets is equal to liabilities plus equity.

Good health is his capital.

So the only liability is this 5,000.

It's good for you.

Because remember, this piece right here only adds up to 140,000!

They elected Hashimoto the Prime Minister.

Do you know the total population of Japan?

It's the share price times the number of shares.

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