Finance Formulas / July 13, 2018 / Aniyah Booth
Liabilities include all of the money a company owes. Similarly to assets, liabilities are divided into current liabilities, which include things like rent, tax, utilities, debts that are payable within a year, and dividends payable. "Long-term liabilities" generally refers to long-term debt the company has issued (bonds), but can include other non-immediate expenses such as pension obligations.
Economic profit or loss is most useful when comparing multiple outcomes and making a decision between these outcomes. This is especially true for decisions with multiple variables that affect and do not affect accounting profit. For instance, one decision may result in a higher accounting profit, but after other variables are considered, the economic profit of another decision may be higher.
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