Liabilities are an important part of the balance sheet and are shown on the right-hand side.
They form the counterpart items to the assets and provide information on how the company's financial resources were obtained. In contrast to assets, liabilities are not assets, but debts and obligations that the company has entered into.
Liabilities include not only equity but also liabilities to third parties, such as suppliers, banks or customers. These liabilities can be short-term, such as supplier credits or overdrafts, or long-term, such as loans or bonds. The amount of liabilities depends on the company's financing policy.
Equity is also part of the liabilities and represents the capital contributed by the owners. It is available to the company in the long term and can serve as a buffer in the event of economic difficulties. Equity can be composed of various sources, such as the share capital in the case of a joint-stock company or the contributions in the case of a limited liability company.
The structure of liabilities has a major influence on the financing and stability of a company. High debt can lead to liquidity problems and affect the company's credit rating. A balanced financing structure with an appropriate equity ratio, on the other hand, can strengthen the confidence of creditors and investors and thus contribute to the company's success in the long term.
