That assets, A for assets, is equal to

It should start to make a little bit of intuitive sense

So this is just another visual representation that

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

I owe these people that money is 700 and my equity is 300.

These are my assets.

liabilities plus equity is equal to assets.

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

liabilities.

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

And so liabilities plus equity is equal to assets.

I'll draw it a little bit bigger.

So once again they're valuing all of the assets at 225,000.

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

Because essentially, or you can view it this way, if you subtract liabilities from both sides, assets minus

My liabilities would be 145,000.

Remember liabilities plus equities are equal to assets.

that assets are equal to liability plus equity.

What's my equity?

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

And we have 23 billion in liabilities.

These are my assets, and these are my liabilities.

Well, its assets are let's see one plus 21, 25, 26 billion in assets and its liabilities are 23 billion.

Because assets are equal to liabilities plus equity.

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

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

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

And this is another important thing to think about.

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

So once again, if this is a balance sheet, this is the assets, here are your liabilities.

Everything is going to be erased.

This is day 10 in this alternate universe.

So the only liability is this 5,000.

Because if someone tells you debt to equity, you can figure out the assets to equity, but in this case, the debt to equity ratio before I took any losses it was what?

living this existence.

So what are my assets?

So then he's done.

So, remember, assets are equal to liabilites plus shareholder's equity, so if all of a sudden the market value of the equity, the market capitalization, for Ben's shoe company is 215,000... (That is the equity part right over here)

So notice, I now have negative equity, right?

20 plus 80 plus 5, so it's 105,000. 105,000 total liabilities.

And it's essentially, what is the market saying the equity is worth?

So what is left over for me?

We said, and we learned it in the first video, and we

It's derived from the original asset.

And then you had the equity, which is essentially the total assets minus the liability.