liabilities

Definition

Everything a business owes to others—debts, obligations, and promises to pay that hang over the company like a financial sword of Damocles. It's the right side of the balance sheet that accountants love to balance against assets, creating the fundamental equation of accounting. Can also mean that person on your team who's more problem than solution.

Example Usage

The startup's liabilities exceeded its assets, but the founder insisted they were 'pre-profitable' rather than 'basically insolvent.'

Source: Accounting terminology

Related Terms

Beginner

earnings before interest and taxes

Operating income that excludes financing costs and tax expenses, providing a clearer view of operational performance. It's EBITDA's more conservative cousin that remembers depreciation and amortization are real expenses.

💰 Finance / Accounting

Advanced

transfer pricing

The prices charged between subsidiaries of the same multinational corporation for goods or services, theoretically based on arm's-length principles but conveniently used to shift profits to low-tax jurisdictions. Tax authorities are not amused.

💰 Finance / Accounting

Advanced

stuffing the channel

Forcing distributors to buy more inventory than they can sell to inflate current sales figures, essentially borrowing from future sales to make today look better. It's corporate kicking-the-can-down-the-road at its finest.

💰 Finance / Accounting

Advanced

DAGMI

Crypto-bro battle cry meaning 'Divine Anarchy Gonna Make It,' the hopium-infused mantra chanted when an NFT project's floor price goes up. It's the digital asset equivalent of manifesting abundance, except with more blockchain and fewer vision boards.

💰 Finance / Accounting

Beginner

book value

An asset's value on the balance sheet after accounting for depreciation and amortization—basically what the accountants say it's worth, which often bears no resemblance to what someone would actually pay for it.

💰 Finance / Accounting

Intermediate

basis point

One hundredth of one percent (0.01%), because apparently regular percentages weren't confusing enough for finance professionals. When your mortgage rate increases by 25 basis points, congratulations—you're paying 0.25% more.

💰 Finance / Accounting

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