In the last set of videos, we've hopefully familiarized ourselves with the different ways that a company can raise capital.

I still owe the almost 1.075 million.

And so liabilities plus equity is equal to assets.

This was not a cash expense, so from our operations we had 50,000 dollars,

And on the cash flow statement you express that saying

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

I find no evidence that this one's any different.

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

So this is just another visual representation that

What's my current state of affairs?

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

It's a holy war against Muslims.

Because the balance sheet is often called the company's books.

Wait! But we spent that 60,000, especially in year 1

That's my net worth.

We have a very, very steady business.

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.

Assets are always equal to liabilities plus equity.

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

And here is the best example, the Contras in Nicaragua, created by the ClA,

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

I'll draw it a little bit bigger.

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.

Well I go to the bank.

Japanese corporations are slashing their capital spending programs.

But this is being announced today.

So the data is now alive this is a living image, and I can update it in a second.

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

liabilities plus equity is equal to assets.

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

This is the market's guess of the value of this company's equity.

So that's a very handsome return.

And what I want to talk about is something that compliments both systems.

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

And this is another important thing to think about.

liabilities really are only 105,000.

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

liabilities.

You can get investors through equity, and we've done several videos on that.

But I just wanted to make it clear that that's obviously the best way to generate capital for your business is when the business itself generates capital.

It's a 40 year old company, it understands manufacturing.

So let's see, 825 minus 75.

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 what I'd do with that 9 million is

So how much wealth is gone from each person's perspective?