Assets are what the company
owns. This could cover a broad range of categories depending on the type of
business, from property and production equipment, through to cash and
payments owed by customers. Assets are usually split into current and
non-current categories for clarity.
Liabilities are one part of what the company
owes. Liabilities are also split into current and non-current categories as
they can cover everything from money immediately owed to suppliers, through
to long term loans which you may not even be paying back yet.
The final part of the jigsaw is
shareholder equity. Alongside liabilities, this completes the full picture
of what a company owes. Shareholder equity covers investments made by the
owner or shareholders, which represent their stake in the business.
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