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Liabilities

Obligations the company owes to someone else: supplier bills, wages, borrowings, lease obligations, taxes and revenue collected but not yet earned.

Like assets, liabilities split by timing. current-liabilities come due within a year; long-term ones do not. deferred-revenue is the odd one out: it is an obligation to deliver a product, not to pay cash, which is why growing deferred revenue is usually a good sign rather than a bad one.

Not everything owed is debt. Lumping accounts-payable in with borrowings overstates leverage. The number that matters for solvency is total-debt and, after netting cash, net-debt.

Example: Northwind Tools owes $910M: $310M current (payables, accrued wages, the current slice of debt), $430M long-term borrowings, $130M lease obligations and $40M of deferred tax.

Related: current-liabilities, accounts-payable, total-debt, deferred-revenue, shareholders-equity

Educational only, not advice. Spotted an error? Post in Site Feedback.