Liabilities

Money the company will have to pay back

In detail

Loans and unpaid bills — everything owed to someone outside. They split into current and long-term depending on whether they fall due within a year. Debt is not bad in itself; what matters is whether it is heavy against what the company earns.

Example

Debts of $60 million against $100 million of assets leaves 40% equity.

Related terms

Interest-bearing debt Equity Current ratio

Read in the app (App Store)

For learning, not investment advice. Decisions are your own.