What's the difference between a debt and a liability?

ConfusedInvestor

Junior member
21 3
so...if you look at a balance sheet for a corporation, there are debts AND liabilities. The two terms seem very much the same, but they must have some notable differences.

also, does one just need to read the balance sheet to figure this out, or is there also relevant info on the cash flow and income statement?

Thanks
Still confused...wish i had the relevant info to start trading a little more...
 

J_C_Anderson

Active member
128 21
I`ll start from the end...

1. Yes, this information could be found only in balance sheet because it is a snapshot of the financial situation at the particular moment while cash flow and income statement just show changes taking place for the period. At the same time, it is better to start analysis with income statement, then move to cash flow and only then analyse balance sheet. In such case you will see particular operations and the way they influence balance sheet. If we speak about investment analysis, this approach gves possibility to sort out many companies just due to the information found in CF or IS even without spending time at BS.

2. Liabilities have broader meaning and could include something that is not a debt. For example, it could include some obligatory payments that the company has to make that are not debts: wages, taxes, payments for rent and utilities. Plus, there could be some specific categories like payments to special funds like retirement funds for employees. In long-term liabilities you can also find defferred tax liabilities if the company has a right to pay taxes later (sometimes such approach could be applied in US).
 

hatemypips

Well-known member
477 35
so...if you look at a balance sheet for a corporation, there are debts AND liabilities. The two terms seem very much the same, but they must have some notable differences.

also, does one just need to read the balance sheet to figure this out, or is there also relevant info on the cash flow and income statement?

Thanks
Still confused...wish i had the relevant info to start trading a little more...
Liability includes debt since it's broader concept, but I would define debt as liability that involves interest and precise time of repayment (series of payments).
 

postman

Legendary member
22,142 2,375
The most important liability if you are a bank is the money on deposit from customers.
It is considered a liability, as you have to pay it back on demand.
 

fibo_trader

Senior member
2,405 44
so...if you look at a balance sheet for a corporation, there are debts AND liabilities. The two terms seem very much the same, but they must have some notable differences.

also, does one just need to read the balance sheet to figure this out, or is there also relevant info on the cash flow and income statement?

Thanks
Still confused...wish i had the relevant info to start trading a little more...

Save yourself now. All the items you mentioned can be fudged, jiggered and jacked. Read only PRICE.

But if you insist, then debts are borrowed money in loans, credit card debts etc. Liabilities are the wife and kids. Get rid of the latter and enjoy your debts in style. With the wife especially you are financing all her whims and fantasies forever - it will never end. This is the ultimate liability. Rent, rent, rent, never buy.
 

ConfusedInvestor

Junior member
21 3
Save yourself now. All the items you mentioned can be fudged, jiggered and jacked. Read only PRICE.

But if you insist, then debts are borrowed money in loans, credit card debts etc. Liabilities are the wife and kids. Get rid of the latter and enjoy your debts in style. With the wife especially you are financing all her whims and fantasies forever - it will never end. This is the ultimate liability. Rent, rent, rent, never buy.
well, that's true, a clever accountant will make the company look healthier than it actually is. Companies, like the treasury, can manufacture value if you will. Trust nobody, trust in nothing!
 

fibo_trader

Senior member
2,405 44
well, that's true, a clever accountant will make the company look healthier than it actually is. Companies, like the treasury, can manufacture value if you will. Trust nobody, trust in nothing!

Well said. I like the way you think.

For balance sheet/Income Statement/Cash Flow statements ........... remember how the company ENRON fooled everybody? Numbers were fudged left and right. The foolish, ever increasingly gullible public bought it and raved about how strong the company looked. Analysts gave it glorious ratings.

Based on my premise, therefore this crap can be all LIES, therefore putting your hard earned money on this is risky. so where is the TRUTH about Enron? Where can they NOT fudge? Where can they not hide their footprint? Where can they just not bs a savvy technician?

PRICE. Price is made up of hi, lo, close, open, vol. Nobody can or wants to mess with these. So voila!

4 trendline choices for investors to bail. Analysts were recommending buying all the way to bottom and zero.

Side benefit to you: Fibo just took the entire subject of fundamental Anal-ysis and drop kicked it out the window. Now your study work is lightened a great deal. go celebrate.




264768
 

fibo_trader

Senior member
2,405 44
Boeing: go look at the balance sheet and cash fflow and income statements. Millions of people did and bought and bought and bought. Apparently things looked good. It was almost impossible to detect the shoddy workmanship that was going on behind the scenes.

Then came the accidents. Theystill kept on buying. Now we can be sure that once the crash gets underway in earnest all the shananigan s on the balance sheet will surface and become known to the public. Heck, but they will have already lost their money.

But Price kept the savvy cats on the right side and got 'em out before the sh** hit the fan.

Parking lots full of these critters, hahahahahaha. Can buy one for 5 bucks in a year or two.




264769
 

scarlet jones

Junior member
25 4
Liabilities have a wider scope when compared to debt. We can say, all debts are liabilities , but all liabilities are not debt.
Liabilities are any short term or long term obligations. For example – accrued wages. Whereas debt is borrowed money which has to be repaid at some future date. For example – a bank loan.
 

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