What are liabilities?

The balance sheet liabilities reveal, through equity and debt capital, who is financially connected to the company.

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The liabilities in the balance sheet show who has provided capital to the company. The liabilities side consists of external capital and equity.

External capital: This refers to capital that has been provided to the company by third parties (e.g., a bank loan). In other words, it is the company's debts. Put another way, it shows the claims of the lenders against the company. The listing of individual items is done according to the maturity of the debt. In short: What needs to be paid quickly is listed at the top.

Equity: This term refers to the owner's claims on the assets of the company. Ownership always arises from the following calculation: Equity = Assets - External capital

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