Equity vs. debt | Stocks and bonds | Finance & Capital Markets | Khan Academy
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- Опубліковано 31 січ 2009
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Debt vs. Equity. Market Capitalization, Asset Value, and Enterprise Value. Created by Sal Khan.
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www.khanacademy.org/economics...
Missed the previous lesson? Watch here: www.khanacademy.org/economics...
Finance and capital markets on Khan Academy: This is an old set of videos, but if you put up with Sal's messy handwriting (it has since improved) and spotty sound, there is a lot to be learned here. In particular, this tutorial walks through starting, financing and taking public a company (and even talks about what happens if it has trouble paying its debts).
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
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the fact i use your videos to teach me stuff (and im in university) says something about the education system. Your videos are amazing and you help hundreds of thousands of students thank you!
We are from t. V. And computer age so we are apt to learn better on computer,t.v. etc. University still uses the book which is going by the wayside.
@Samir Albert Coool! I'm using Parrot Sec so could use that.
my uni does this too lmao
Its 2023 and I am using this too for Uni
wondering why Khan academy is way easier to understand than any other university education...
Dear Mr Salman, I don't know how to appreciate your wonderful job, I only can say that I wish there were more people like you on the world.
9999999999999999pe p?
The content look/feels so FRESH even though it's 12 years old.
That's what 'Khan Academy' is!
Timeless creations to inspire generations after generations.
your videos are lifesavers :)
X CD. Xxxcc
so true
that was a quite good drawing of the stock chart
Such great video for both financial and stock operators, simple rational built great foundation, thanks
Really Dope content for sound basics!
I am 55 years old with very little set aside for retirement at this point. I have always been curious about the stock market and have witnessed some people who played the game right and retired early because they used the stock market. When I ask them, most said that they invested very little to start with, but their portfolio grew. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make decent returns.
Buy index funds if you wanna be safe, though you are probably be better off just going to Vanguard or something for that
Even with the right technique and assets some investors would still make more than others, as an investor, you should've known that by now, nothing beats experience and that's final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I'm buying again
@@jaluriaja6294 who is your financial coach, do you mind hooking me up?
@@santiagoagustine3749 "My consultant is *Loretta Wilkinson* I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provide entry and exit points on the securities I focus on.
@@santiagoagustine3749 You can look her up online if you care supervision. I basically follow her trade pattern and haven't regretted doing so"
Perfectly explained !!
11 years ago 😱 good content
THANKYOU
So nice, thanks for the effort
thanks khan really it's helpful
Thank you for this video!
I begin to like you videos and explanation very much. Easy to understand. Thank you.
you should do a video on stock schemes (i.e. boiler room, enron, madoff)
those would be really interesting
Thank you Sir
good content, thanks
i want to get some stock money but I don't believe it until I know exactly what's all about you're very good at explaining I just wish I could really get the whole game.. I feel nervous but hoping for beginners luck
I wonder how is it possible that you can teach every thing and in such a nice way, your are wonderful man.
Thank you so much for this video is so useful
Thank you!!
awesome video!
thanks it really make the calculation easy,,,,for calculating the asset is it right as stated above to add the numbers of shares to the borrowed money or the the worth of share to the borrowed money to the total asset????
good one
Excellent.
nice, thx
Thanks!
Really great, simple, informative video.
Awesome video! Khan easy to understand analysis makes it easy for us Laymans to understand! Cant thank you enough for making the complicated simple.. mark of a true genius! :)
I think Sal should do a video on what he feels is the best way to end this crises if he were president. I'm wondering if he feels that building new bridges, roads, and increase government spending on education will trigger enough capital to get the world out of this mess we're in. Or does he think starting a war like we did after the Great Depression will be the best solution.
someone bring the founder of KHAN academy a NOBLE PRICE!
I like equity market
great work!!, very clearily explained , so useful!
I love the way you explain, insightful video!
very good videos.great explanation!
Very informative and made very simple - thank you :-)
really great video.. easiest way to learn finance......thank you so much
Great work, can I ask for a lesson on " cost of equity " ?
Seek for help!!!I am new to finance. I get the difference between quite vs debt now, but it sounds similar to the relationship between bonds vs share. Am I right? What is the differences between these two pairs of words??
They sound familiar because they are both the same.
Debt = bonds or loans
equity = shares or stock
Firms issue debt in the form of bonds to raise capital. Or they may raise capital in the form of equity.
Big like
I learned a lot with this video. Thank you so much
stocks will continue to rally, stocks are not the economy, I had 250k put aside waiting for the fed to stop raising rates. Now I want to get back into the markets, but the hike will continue and stocks are still climbing, I’m confused and happy to discuss.
The stock market will go down further and goodluck on the fed pausing rate hikes w/ all the hawkishness that has failed to keep up with inflation.
Fixed income and treasuries may work for you while you try to figure out the next entry point for stocks
It is always good to have a balanced fin-plan. I work with a professional planner and fixed-income strategist in NY. the fixed income portion of your portfolio won’t simply serve as a buffer to the volatility of the equity portion of your portfolio, but will provide legitimate income.
@@ClaudiaRom Who are you working with please?
@@_davidturner LOREN LENA WALKER, advanced lady in 60s or 70s and professional, reserach if you care for supervision.
hi i am starting a company with a friend. i am asking how do we decide on equtiy n debts? how we agree on share capital for both us before bringing in investors?
I think if you can't figure out how to raise capital maybe you should not start a business. The answer lies in which cost less.
As a business owner you only have three priorities:
lower costs
grow revenue
improve total net profit
what does it mean when company sells it equity? Is it consider as good or bad ?
it means it is selling partial ownership of the company to raise funds
Equity is the same as stock. When a company sells equity it means they raised money by selling a portion of the company in the form of equity- or stock.
Firms usually go to investment banks to sell equity because investment banks are skilled at valuing equity and have strong networks of investors.
Firms raise money (capital) either through debt (loans) or equity (stocks).
@MTran0708 thanks for the response
@yoyaya007 he went to MIT and Harvard business school.
"Debts interesting". Literally.
Thank you so fucking much!
2:30 technically that is not what debt is at a bank kevl
why does increasing debt increase the value of your company? in other words, why isn't the company's value lessened by debt?
With debt the company can buy assets and therefore increase the value of the company.
Yes as UD explained just like on a balance sheet when you increase debt your cash also raises (increasing your assets). Assets = Liabilities + Owners Equity so both your liabilities and assets increase, making your assets larger than before but the firm's book value stays the same
increase debt increase asset. it offsets in the equation
It's not the value of the company, it's the equity's value, it increases because equity means the money the company owns to invest or spend, and the company has his own cash plus borrowed money (Debt) to invest or spend
he has about 4 MIT degrees and worked at a hedge fund
Seriously?
When you say debt. are you talking about total liabilities , or are you saying total debt, total Long-term debt, etc?
Assets= capital + liabilities/
A= shareholders funds+ outsiders funds/
A= equity + debt.
So debt only includes outsiders money that is borrowed, nothing to do with companies own money. And hence one also has to pay interest on the borrowed funds unlike on the equity money.
And total liability includes everything of the other side of the assets.
Doesn't matter if debts long term or short term. Debt's debt
what man u know maths physics business whaat where did get all this knowledge and how old are you ??
Is this Thomas Sowell narrating?
I always get confused how a company having debt can add value to the company?
basically, taking on more debt means that you also have more cash on you for the time being. As a result, that cash can be seen as increasing the value of the company because your company has more value in the form of cash/debt.
but what if the companies assets fall drastically in value? So if the $150 million had been used to make a rocket that was now obsolete and only worth $50 million. how would that effect market cap? or say the rocket was worth only $1 million and there is the $3 million debt - surely then the company is bankrupt?
Bankruptcy is when the company cannot pay its current debts, such as payroll. If the value of the capital assets of the company fall by 90% then the value of a given shareholder's portion of the company falls by 90% but it is not bankrupt. As long as it has money to pay its current debts which can include interest on bonds it issued or or payments on loans it took out but not dividends to stockholders, a company is not bankrupt.
Thanks Sal, I am actually doing engineering but somehow I had to learn the infernal course of entrepreneurship in semester 2 and you helped not only in electronics and thermodynamics and chemistry and calculus and differential equations and physics but also in learning these business field related courses
An apology if I forget to mention any other subject !
almost like being paid royalties ?
I need investors.
How does he put another 1M to Stock Market. Where does it come from?
Jairel Danet Polii he raised it via FPO .
He raised via another public offering, we can go deep in if it's the best option or not, he could offered preferred stock to the market, in that way, current share holders don't have to give up a portion of their ownership
Cool Fact: It can take a photon 40,000 years to travel from the core of the sun to the surface, but only 8 minutes to travel the rest of the way to earth
Wow, you mentioned Amazon in 2009. It has a trillion dollar market cap now
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please share it in hindi
No assets no equity one tenth worth of assets can be considered equity.
another way for the company to borrow money (debt) is to sell bonds !!!!!
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I'ma guess engineer
selling socks! haha
messy, kinda confusing
What are you studying this for?
so... self-financing is no longer a thing in the humanist controlled-market
@georgebushsen
"investment and finance is the heart of capitalism it's all about these two things"
Of course, but that does not mean we should all be naked short sellers, or that naked short selling should be financially encouraged.
ayyyy lamo
Khan acedamy plz stop using black backgroud... it makes video bit boring
. 😅😅😅😊
Sir you wasted a lot of time by drawing lines and graphs.
Who's fsrakyh ? No such person here. Spammer detected.
what about fuckin inflation baby?
6:35 if someone with a Bloomberg terminal is learning about this here, we're all fucked.
Lol, so you want to learn how to do a Ponzi?