There are 4 letters, so when you’re creating a new combination you have 4 spots to fill:
__ __ __ __
You have a choice of 4 letters for the first spot.
Once that’s filled, you had a choice of 3 reminding letters for the second spot,.
Now you have a choice of 2 letters for the third spot.
Once the first three spots are filled, you’re left with only one choice for the last spot.
This means you have 4x3x2x1 possible ways to arrange those letters.