Equity and liabilities of a company Equity and liabilities of a company Equity and liabilities of a company Equity and liabilities of a company Equity and liabilities of a company
Abstract
Equity and liabilities are essentials for every company. This is distinctly shown during an economic slowdown.
It is specially shown that frequent taking of a liabilities causes company considerable difficulties and these become more vulnerable due to it. Companies should know this and take equity and liabilities in a sensible way therefore.
Present economic trends encourage to prefer taking of a liabilities (credits, loans) to taking of a equity (equity capital, retained earnings). Nevertheless the taking of a liability must be always paid regardless of the reality, if the company is able to paid, whereas the company pays for the taking of equity only if it decides so and in the amount it decides.
Rules can help so that companies would be less vulnerable, namely, rendering the taking of the equity more attractive in order to let the companies take equity and liabilities more equally.