00:01
So here we've got a basic question about balance sheets.
00:03
And to tackle this, the first thing we need to know is what equity is.
00:07
And the easiest way, the definition of equity is pretty straightforward.
00:11
It is sort of assets minus liabilities.
00:15
But a broader definition of equity that is the same thing, right, but it's how i think of it.
00:22
It's how much the owners have put into the company, right? imagine that you start a business and your business has a $100 of cash that you just put into it, right? the business has got $100 and you've got $100 at risk, right? that makes it a liability to you.
00:44
You are risking your $100 by putting it into the business, or into the company.
00:52
So here, if we charted assets and liable, sorry, that wasn't the greatest typography.
01:02
Assets and liabilities, what would we get? right? so our assets here are cash.
01:12
Cash is an asset, 22 ,000.
01:18
We've got accounts receivable...