B got that wrong, so B's answers were 50 out of 51 possible points.

So liabilities. Liabilities.

Let's say assets and I'll talk about margin requirements

And then we have the debt, the debt of the company, or the

Let's think about its liabilities.

I owe the bank 750,000.

Intuitively, too, this makes sense.

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

This was equity.

I'll be happy whether I win or lose.

His debts amount to more than he can pay.

liabilities as well.

It had 5 million of debt.

What are my liabilities?

That assets, A for assets, is equal to

Most times the liabilities are pretty easy to get a handle on.

Her debts amount to more than she can pay.

Or the other way to view it is, assets minus liabilities is equal to equity, right?

If you shatter this fishbowl so that everything is possible, you decrease satisfaction.

Minus 1.075 that was the max that I could borrow

Everything on the right hand side is equity, so this is all equity.

I still owe 750,000 to bank.

So my liabilities I owe the bank 750,000.

But it's not irrelevant.

An even bigger picture, if I now look at my balance sheet, what are my liabilities now?

This is the equity...

So we could say, well, a new figure comes out ... let's see African debt.

Well, its assets are let's see one plus 21, 25, 26 billion in assets and its liabilities are 23 billion.

And so in effect, we trade average happiness.

I want you to examine it, and make sure it's solid.

Satisfied.

I think I had called it Loan C.

And this is an annual income statement.

What I'm squaring off in blue, that's the

So where does this lead?

Well I have cash, I have 250,000 worth of cash.

It doesn't matter.

I had 100 of cash, no accounts receiveables,

So the only liability is this 5,000.

Let me just make everything clear.

These are the assets that our five buddies have together.

So over here you had another liability.

So in this case, our assets are 250,000.

My assets are 250,000.

And this is another important thing to think about.