MASTERCLASS Investment – The Difference between Debt & Liability – Need to know what is used in a ratio

MASTERCLASS Investment – The Difference between Debt & Liability – So know what is used in a ratio

MASTERCLASS Investment – The Difference between Debt & Liability – So know what is used in a ratio

Often, investors use liability and debt when they mean the same thing. But there is a difference between Debt & Liability and one needs to know what is used in a ratio to understand it’s meaning. For example in the debt-to-equity ratio, debt means the total amount of liabilities. This means, debt includes short-term accounts such as overdrafts and credit cards and normally also includes accrued wages and utilities, income taxes due and other liabilities, plus long-term accounts and long-term loans and bonds payable. In other words, sometimes debt means all obligations… all amounts owed… all liabilities.
However, other times, the word
 debt is used more narrowly to mean only the formal, written financing contracts such as short-term loans payable, long-term loans payable and bonds payable, example – hire-purchase, equipment finance, etc. See more on Debt To Equity
As always, keep these in mind to know WHAT is being used – be clear and have it defined!

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About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in 2 Past Newsletter Topics, Investing - Stock Fundamentals, Masterclass Investment, SMSF Investing and tagged , . Bookmark the permalink.

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