Impact on Business Health
Understanding and managing the balance between assets and liabilities is crucial for business health. A company with more assets than liabilities is generally considered financially healthy, as it has the resources to cover its obligations and invest in growth. Conversely, a company with more liabilities than assets may face financial difficulties, as it may struggle to meet its obligations without additional financing. Effective management of assets and liabilities is essential for maintaining liquidity, ensuring profitability, and achieving long-term success.
Expand
