Ch 10 Reporting and Analyzing Liabilities
A liability is a debt owed to a third party; a company cannot have a liability to
Current Liabilities: are obligations due within one year or within the companys
normal operating cycle if longer than year.
Cash Flow Statement: Shows what the Company does with their cash, reconciles cash basis to accrual
Use to determine:
The companys ability to generate future cash flows
The companys ability to repay debt
How much cash was spent investing in assets
A publicly held corporation is regularly traded on a national securities market and may
have thousands of stockholders.
A privately held corporation, often referred to as a closely held corporation, does not
offer its stock for sale