So this is the assets.

The rights on those payments that's the asset.

It's not like I didn't have any cost here.

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.

So that's what an asset is.

So they really had, let's see, they had an 80,000 loan, a 250,000 asset, so they really had 250,000 minus 80,000, that's 170,000.

So this is just another visual representation that

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

Manage your personal finances

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

I don't want to draw this box.

And the equity is really, the people who own the company. what is their stake?

So I'm going to give you a little equation, actually, just to take a little bit of a tangent.

So 225,000

So whenever they get this money into circulation they do go out there and they do buy assets usually treasury assets, and then they say even, Indeed, although the bank of Japan's policy, so he's comparing relative to what Japan did when they kind of faced deflationary crisis.

let me give you that piece of terminology, it just means net asset value.

And so liabilities plus equity is equal to assets.

...I'm printing the money so that I can buy particular assets,

These are my assets, and these are my liabilities.

Malibu Equity and Investments. Roger Van Zant.

I'll draw it a little bit bigger.

Things like that.

So its assets.

I'll do that in yellow.

So in general if you want to know what I think is the best

What are my assets?

liabilities plus equity is equal to assets.

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

The assets are generating this.

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

you have to buy this back from me at the NAV (net asset value) per share.

That assets, A for assets, is equal to

Or across the street from each other.

I still have no liabilities

liabilities.

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

So in this situation, the company is worth what?

So if I just had a personal balance sheet,

Malibu Equity and Investments.

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

So once again, it's just a loan to someone else.

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

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

An investors' group is attempting a leveraged buy out of the firm.

Even though it might be worth 20 million, a year later you might not there are only so many people who can afford a 20 million house.