So this is just another visual representation that

And so liabilities plus equity is equal to assets.

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

And on the left hand side, I have no liabilities.

You might owe other vendors money or whatever.

So 26 billion of assets minus 23 billion of liabilities means that we have 3 billion of equity of shareholders' equity.

I'll draw it a little bit bigger.

All right, I'll pick up the chip.

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

They could say, well when I go to my financial planner, they said, oh, it's so inefficient for you to have all of that equity sitting in your house.

So he owns it outright so all of the 100,000 of asset value is actually his equity.

So we have 5 million of equity.

All of our earnings actually fall down straight to equity.

So that's a very handsome return.

liabilities plus equity is equal to assets.

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

I use 100 gold pieces.

He picked up the book.

liabilities.

liabilities plus equity.

Well, assets minus liability.

Well, I have 250,000 left over.

And why is that?

So that's a liability.

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

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

let me just draw you a spectrum here.

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

Tom picked the book off the floor.

That assets, A for assets, is equal to

So we still have 5 million of debt.

And this is called the equity, or the owners' equity.

But we'll do a whole playlist on that.

Hong Kong, Singapore and Sidney.

I wish I'm rich, but I don't have this in cash.

Well, they lost, by entering into this transaction, essentially, they lost whatever equity they originally had in their house.

My liabilities would be 145,000.

They ran squarely into one another in such a way that he knocked the books right out of her hand.

Who'd like to help me pick up those books?

like any corporation, and they have to, the liabilities, plus the equity has to match up to the assets.

What does it imply about the value of that asset?

This is their current assets, and let's say that is is their liabilities over here, so liabilities, and then this is their equity, although the federal reserve's equity is a little bit strange, it's not like traditional equity, that they get all the excess profits and all of that, all the excess profits actually go to the US government.

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

I have no liabilities.

Exactly what I'm thinking, boss.