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

[ConfusedInvestor]

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]

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]

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]

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]

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]

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]

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.

 

[fibo_trader]

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.

How Boeing could ultimately be responsible for killing the bull market

“I am concerned the market is underestimating just how bad things could go for Boeing,” Bill Blain warned in his morning note earlier this month. “When it...

www.marketwatch.com

 

[scarlet jones]

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.

 

[NVP]

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...

a Debtor is someone who owes money...a liability is someone you cant seem to get rid of

 

[NVP]

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.

How Boeing could ultimately be responsible for killing the bull market

“I am concerned the market is underestimating just how bad things could go for Boeing,” Bill Blain warned in his morning note earlier this month. “When it...

www.marketwatch.com

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since when has cold hard solid accounting logic ever aligned to share prices ?.....back in the 80's I used to spend exponential hours analysing balance sheets and looking for hidden value in companies ......then i finally realised it was easier just buying stock prices as they were rising and dumping/selling when they were falling ....we humans do love making it more complicated than it is ......N

 

[fibo_trader]

since when has cold hard solid accounting logic ever aligned to share prices ?.....back in the 80's I used to spend exponential hours analysing balance sheets and looking for hidden value in companies ......then i finally realised it was easier just buying stock prices as they were rising and dumping/selling when they were falling ....we humans do love making it more complicated than it is ......N

Amen!

 

[fibo_trader]

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...

Another perspective taken from real life ......................... Fundamental Analysis (Balance Sheets, Income statements, debts, liabilities, cash flow, News) applied to Elections ...... clearly suggested Donald Trump would lose. Heck, they even threw in Character into the mix. It was a sure shot, guaranteed bet .... He would lose and lose big and in fact had already lost.

But those who watched PRICE ONLY were saying, "not according to Price" ............. it was a giant dilemma because if one is wishy-washy about Price, one gets swayed easily by the large crowd

PRICE won as she always does especially when things seems bleakest she delivers a bullrun and when things seem too hunkydory she delivers a bear-run

 

[Dreamer8]

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.

Well explained!

 

[Melodiousmelody]

All debts are liabilities, all liabilities arent debt.

 

[Beast45]

All debts are liabilities, all liabilities arent debt.

Short and simple!

 

[marcela 2020]

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!

You said it

 

[Joseph99]

The basic difference between Liability and Debt is that Liability is a wide term which includes all the money or financial obligations which the company owes to the other party, whereas, the debt is the narrow term which arises when the funds are raised by the company via borrowing money from the other party.

That's correct!

 

[hatemypips]

The basic difference between Liability and Debt is that Liability is a wide term which includes all the money or financial obligations which the company owes to the other party, whereas, the debt is the narrow term which arises when the funds are raised by the company via borrowing money from the other party.

Isn't it the same then? All money that we borrowed are some funds that we owe to the other party. Basically you considered two sides of one coin.

 

[Melodiousmelody]

Short and simple!

Thanks!