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What occurs when a value of a firm debts exceeds the value of the shareholder equity?
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What is the difference between liability and expense?
Liabilities are debts owed to an outside party (creditor) such as a bank loan, a truck note, etc. Expenses are the cost of operating the business and affect the net income. Expenses include things such as utilities, supplies, insurance, rent, etc. While liabilities are listed on the balance sheet, expenses are not. Also, Liabilities decrease Owners Equity (Stockholders Equity) while Expense decrease Net Income.
What is Financial leverage multiplier?
The leverage multiplier equals to total asset dividing by shareholders' equity. The high leverage multiplier indicates that the firms decide to overcome the high levels of borrowing or debt on which it must pay interest. The higher ratio means higher liability than its shareholders' equity. Essentially, the ratio is mainly used to help firms making decision about how to raise funds by undertaking debts. A company will only undertake significant amounts of debt when it believes that return on assets (ROA) will be higher than the interest on the loan.
How many suicides are due to IRS?
I have no clue, but I think about suicie from time to time due to the enormous debts, including tax debts.
Where can you find a percent larger than 100 percent in a newspaper?
Look in the international finance section - at some countries' debts as a percentage of their GDP!
When did welcome finance go bankrupt?
Welcome Finance went bankrupt sometime in 2009. It was in receivership for several years after that still collecting on its debts.
Can a home equity loan be used to pay off other debts?
Yes.
What is up with the liabilities Why companies have generally larger debts than equity?
The short answer: Tax write-offs. Equity is what is left when total liabilities (debts) are subtracted from total assets. A small or very new company may have a very small equity (possibly even negative), while a larger, more established company (like M$) will have a large one.
If you have two homes can you reassure only on 1?
You can reaffirm any secured debts you want, so keeping one house is not a problem. I would contact an attorney though and speak with him or her. Little details like that can cause problems if you file yourself. The trustee has ultimate say over what you can and cannot reaffirm. That goes for homes, cars, or any of your debts. If you have two homes, and by selling one, the equity would allow for payment of some of your creditors, then plan to lose the house. The same thing goes for your primary residence. If you have enough equity that it exceeds your homestead exemption (varies by state), you may be forced to sell your home, in order to use the equity to pay off your creditors.
Assets equal liabilities?
Yes assets are equal to liabilities. As liabilities are source of financing either inform of equity or inform of debt. With help of liabilities (equity+debts) assets are financed.
What does the word Limited stand for in Private Limited Company and Public Limited Company?
The word "limited" stands for "limited liability". This means that the liability of a shareholder in a company for the company's debts (for example, in an insolvency or liquidation scenario) is "limited" to any unpaid capital on their shares. In most cases, there will be no amount unpaid (ie. a fully paid share) and so no liability of a shareholder for the company's debts.
What are the Advantages and disadvantages of debts and equity finance?
It's possible to raise more money than a loan can usually provide.
What ratios is least useful in a evaluting a company's ability to pay its current debts as they become due?
debt to equity ratio
What are the benefits of limited liability for the individual shareholder?
One of the main benefits is that if company fails, then the owners (shareholders) don't have to pay the company's debts. Only the investment (in the form of shares) that has been put into the business can be used to pay off the debts. It's also alot easier to raise capital than in a sole tradership or a partnership, as people can invest in the form of shares.
Does bankruptcy attorney keep rental property income?
The answer to this question depends on whether you are filing Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, if the rental property has equity, meaning that the value of the property exceeds what is owed on the property, the trustee would almost definitely seize property and sell it to satisfy some or all of your unsecured debts.
Is a new business owner responsible for the original owner owner's debt?
Not normally, unless the new owner has also 'bought' the previous owner's debts. However, if we are dealing with share ownership, the shareholder become the 'owner'. Shareholders are not responsible for the debts of the companies they have bought share in.
What is the meaning of corporate insolvency?
The definition of corporate insolvency is the inability to pay debts. It occurs when the business or corporation does not have sufficient funds to pay off its debts.
What has the author Daniel Oks written?
Daniel Oks has written: 'Wealth effects of voluntary debt reduction in Latin America' -- subject(s): Debt equity conversion, Debt relief, Debts, External, External Debts
