That improves my return on asset.

I have a 5 return on asset.

He's getting this great return on asset.

I'm getting this crummy return on asset.

So my return on asset is 7 .

And he had this great return on asset.

Imran's getting a 7 percent return on asset.

And so everyone's return on asset improves even more

So sometimes when people talk about return on asset which

But his return on asset has gone down to 20. and, because he's at that utilization, his return on asset has gone down to 20 .

And then my return on asset has gone down to 1 .

But of course I didn't get any asset in return for that.

And if earnings increase and the overall asset doesn't increase, your return increases.

And so I'm making 200,000 per year, that's an 18 return on asset.

But anyway, here I want to figure out what is my return on asset?

And I make 962,000 a year and I have a huge return on asset, 88 .

But when you use leverage, the return that you get on your asset gets multiplied when you get the return on your equity.

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

In this example that I did in the previous video, it was the pre tax return on asset.

So the 1 million asset would really become an 800,000 asset.

So 1.1 million cupcakes are getting sold a year and then this is the average return on asset, right?

It's the same asset.

So that's the asset.

So it's an asset.

That's an asset, right?

So it's 50 utilization and then, my return on asset is my operating income divided by my initial investment, right?

And my cupcakes, I only started selling 250,000 of them and then my return on asset essentially went to zero.

Let's ignore this for a little bit because now, in this reality, I'm getting a 15 return on my asset.

That's its asset it has.

So it's an illiquid asset.

This is a real asset.

Why is cash an asset?

And other sources, namely Wikipedia, will tell you that it is actually so this is one definition of return on asset.

But when you talk about return, what you get off the asset, you still are going to pay taxes on them.

High utilization will allow you to raise prices and when you raise price you'll get a better return on your asset, and then the other side effect is, when you have that high return on asset, you'll also have more investment going on to build more capacity.

The entire asset was his equity.

It's derived from the original asset.

So I would revalue the asset.

So cash could be an asset.

So that's what an asset is.

He would be a great asset.

So as you see here, if I charge 2.80 and I only sell 300,000, then this is my return on asset right here.

And then Vikram is making a 12 return on asset because essentially, he undercut everyone and was able to take all the volume.

So when you have an asset, if the asset is cash, the rent on it is interest.

I did in that last video it might be interesting to say, is that the pre tax or the post tax return on asset.