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.

So its assets.

I'll do that in yellow.

That assets, A for assets, is equal to

Malibu Equity and Investments.

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

Obviously , a machine you can't do all of those things to it, but you can at least touch it and possibly smell and taste it.

You'd have to give up 93 of your net worth.

I don't want to draw this box.

And rich, eh?

So let's say when we liquidate it so we go into bankruptcy and essentially all of the assets are taken into possession by the bankruptcy court they're going to sell these assets.

Remember liabilities plus equities are equal to assets.

Each share in this case once again, if you believe that the assets are worth 1 million are going to be 1 million.

It's what the market is willing to give for it.

It should start to make a little bit of intuitive sense

Malibu Equity and Investments. Roger Van Zant.

Or they just have a super flush bank account.

So 225,000

I have factory tools worth 500,000, and then that cash will go away.

liabilities plus equity.

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

I won't use the square tool.

We had a 10 return on assets.

And why don't you like them as much?

And it's worth 100 gold.

That might be true to some degree.

The Raider's a military asset.

And if you look at the species level, you saw about fish.

These are my assets, and these are my liabilities.

He is a man of wealth.

He's a wealthy man.

Or across the street from each other.

So the total assets were 5 billion in assets.

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

So this is just another visual representation that

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

I use 100 gold pieces.

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

But when I talk about the asset, I'm talking about only the operating assets.

little bit.

I still have no liabilities

So I'll write that up here.

like a balance sheet.

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

liabilities.