So these assets might be generating non operating income.

Let's say out of this 10 million of assets, let's say that 9 million are operating assets.

ROA, I would say it's EBlT over assets, which is very close to operating profit over assets.

Because some of income might be generated from non operating assets.

But if the assets are worth operating, they'll continue to operate.

This financial audit also includes an evaluation of the company's assets.

But when I talk about the asset, I'm talking about only the operating assets.

This guy has some non operating assets, although it's officially part of the company.

And then the very first definition I gave you was operating profit over assets.

While this guy, he borrowed some money and he even had some non operating assets.

But if you really consider all of the assets, and if you assume that there are some assets there that are non operating.

Financial

Operating System

Operating system

What we used to believe for strategy is that you start any company with an operating plan and a financial model.

I didn't want to go there in the first video, and that's why I just said operating profit divided by assets.

And so you can already imagine that both EBlT and the way I defined it initially, operating profit divided by assets.

But the assets keep operating, and that's why some people are a little bit misleading in this whole automotive bankruptcy debate.

Financial Functions

Financial Functions

Non operating income.

So operating profit.

I see the memory operating, I see the CPU operating,

I hear it operating. I probably smell it operating. (Laughter)

So assets.

Total assets.

That assets, A for assets, is equal to

They're generating the operating profit, and that's a very important thing to realize in the future when we talk about return on assets.

So the total assets were 5 billion in assets.

So if I calculate it using you EBlT divided by assets, or operating profit divided by assets, if I use either of these as my metric for ROA and Company A has a 10 ROA and

Well, financial services.

Choose Your Operating System

RPC Modern operating systems

RAP Older operating systems

So their operating profit.

This was operating profit.

RANDALL Operating right now.

What's your operating number?

And you don't know what is operating, but something is operating there.

That's its assets.

Other current assets.

So its assets.

These are assets.

But it's determined that these assets, right here, are actually worth more as an operating entity than they are if you were to liquidate them.

It went into bankruptcy, and it was determined that these assets that it had right here, that it made no sense operating them as a company.