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Business & Finance

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

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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.