Ownership equity

Ownership equity
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makeup of the right-hand side of a company's balance sheet, which includes all the ways its assets are financed, such as trade accounts payable and short-term borrowings as well as long-term debt and ownership equity.

The debts and obligations of a company that exclude ownership equity.
Liabilities are found on a company's balance sheet.

INSOLVENCY: The condition of a business when liabilities (excluding ownership equity) are greater than Assets. In other words, a business can't pay it's debts.

The way in which a company's assets are financed, such as short-term borrowings, long-term debt, and ownership equity. Financial structure differs from capital structure in that capital structure accounts for long-term debt and equity only.

There are differences in companies that are leveraged as opposed to those which are not. Leveraged companies are often referred to as a company made up of debt and ownership equity. A company which is not leveraged is viewed as an all-equity company.

Liabilities: All claims on the assets of an individual or corporation. Includes accrued payable amounts, long-and short-term debt, debentures, and notes. Does not include the ownership equity.

Often the reason is obvious, such as when a once-reliable bottom line turns negative, placing employee jobs, ownership equity, and product or service quality at risk. Sometimes, however, the need and potential benefits are not so obvious.

Financial structure The way in which a company's assets are financed, such as short-term borrowings, long-term debt, and ownership equity.

See also: Expense, Capital structure, Saving, Banks, Funding