Liabilities
Also called: liability
What a business owes to others, such as loans, money owed to suppliers, salaries due and taxes due.
Liabilities are obligations to pay in the future. Current liabilities fall due within about a year; non-current liabilities, such as long-term loans, fall due later.
High liabilities relative to equity mean a business depends heavily on lenders and has less cushion to absorb losses.
Learn more in these lessons
- Assets, liabilities and equityWhat are assets, liabilities and equity?
- The balance sheetHow do you read a company's balance sheet?
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