Let's calculate our total liabilities.

But let's just look at what they're saying.

I can do is... So he needs 100 gold pieces.

And this is another important thing to think about.

I'll do that in yellow.

Because in the last video I talked a little bit about return on asset, where we just took the operating profit, and we divide that by the assets.

liabilities plus equity is equal to assets.

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.

Now we have 225,000 in cash.

All of the assets needed to start the firm, the pizzeria.

Remember, every time it'd issue a loan, like for right here, it issued a 100 gold piece equivalent loan to D and instead of giving D 100 gold pieces from, say, right here, it just created a checking account for D, which later D paid to A and that's why it's labeled A right here. Let me relabel another thing because the gold is a different color just so you see the gold.

But let's just kind of think about a generic balance sheet for a bank.

So this is just another visual representation that

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

And so you create a derivative asset.

Frobisher's net worth is upward of two and a half billion dollars.

So let me draw that out.

I don't want to draw this box.

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

And then when I have 1 10 of two million shares,

Things like that.

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

These are liabilities.

And so you can see very simply that assets I'll write this down, you're getting a little bit of a introduction to accounting right here but assets are going to always be equal to liabilities plus equity.

And then when we go and get the property because the

Malibu Equity and Investments. Roger Van Zant.

So its assets.

And let's say our debt is 6 million.

So I'll write that up here.

liabilities plus equity.

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.

Now, the angel investor, if we value this at 5 million, he'll give us 5 million more.

So this is the assets.

I use 100 gold pieces.

With private ownership nonexistent, our wellbeing is on the rise.

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

900 gold pieces I lend out.

And then whatever assets I get I would have to sell it.

That assets, A for assets, is equal to

like an equation, but it's assets is equal to liabilities plus equity.

Or across the street from each other.

If you take an MBA, they'll write it down, and it looks

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

liabilities.

loan to Bank A.