Liabilities

Liabilities refer to the financial obligations or debts that a company owes to external parties, such as individuals, banks, or other financial institutions. These debts can take various forms, including bonds, debentures, salaries, taxes, loans, and more. Liabilities are a crucial part of a company’s balance sheet as they help indicate the company's financial health and leverage. By managing liabilities effectively, a company can signal financial competence to stakeholders, such as investors, creditors, and shareholders. High liabilities can increase financial risk, but they can also be used strategically to fund growth and operations.