Companies use fixed assets to manufacture, display, store, and transport products. The amounts of fixed assets vary by company and industry. For example, manufacturing companies generally have a large investment in fixed assets because making things requires property, plant, and equipment. Service companies usually have fewer fixed assets. On the statement of financial position, debts are called liabilities.
All companies have liabilities.
Current liabilities are due within one year. Long-term liabilities are due after one year. Although liabilities are a necessary part of doing business, companies must manage their liabilities carefully. If a company cannot make interest payments on time and repay the principal when due, the company can be forced to declare bankruptcy and either reorganize or disband. Stockholders' equity Stockholders' equity is the amount owners invested in new stock plus the earnings the company retained since it started.