So notice, it still does not change our Equity.

So liabilities. Liabilities.

Let's say assets and I'll talk about margin requirements

And then we have the debt, the debt of the company, or the

Let's think about its liabilities.

Now what's different about them is what happens on the other side of the balance sheet and this is what I meant by them having different capital structures so let me draw the liability's side for both of these characters so let's do liabilities

So this expression right here is going to be non negative.

I owe the bank 750,000.

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

This was equity.

liabilities as well.

It had 5 million of debt.

What are my liabilities?

That assets, A for assets, is equal to

Most times the liabilities are pretty easy to get a handle on.

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

Minus 1.075 that was the max that I could borrow

Everything on the right hand side is equity, so this is all equity.

I still owe 750,000 to bank.

So my liabilities I owe the bank 750,000.

That means that you've increased your Accounts Payable by 100.

An even bigger picture, if I now look at my balance sheet, what are my liabilities now?

This is the equity...

So we could say, well, a new figure comes out ... let's see African debt.

Adding the following additional network routes

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

I think I had called it Loan C.

And this is an annual income statement.

What I'm squaring off in blue, that's the

So where does this lead?

Well I have cash, I have 250,000 worth of cash.

It doesn't matter.

I had 100 of cash, no accounts receiveables,

So the only liability is this 5,000.

Let me just make everything clear.

These are the assets that our five buddies have together.

So over here you had another liability.

So in this case, our assets are 250,000.

My assets are 250,000.

This told us they both have to be negative because this is positive.

In some times in history, these people would actually owe the difference.

Now you could also have a yield curve for other types of debt.

He only needs 90,000, but let's say he borrows 100,000.

So given that 2 on 100,000 debt.

So now I have this liability.