Asked in
Business & Finance

What is up with the liabilities Why companies have generally larger debts than equity?


User Avatar
Wiki User
October 10, 2008 5:02AM

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.