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Many people argue about the makeup of the financial statements of a company. A company could be 50% equity and 50% debt. Different companies could have different ratios of assets and liabilities. Think about financial terms such as Return on Investment, Liquidity, Current Assets and more. Think about whether the company pays liabilities when they are due. Think about loans, bad debt expenses, uncollectible debts, accounts receivable and contractual agreements. Think about the interest that could be collected from debt. Think about what an ideal balance sheet, income statement and statement of retained earnings would look like. The numbers are important. Too much debt could be a disadvantage to people. People or companies or countries can consider spending less money than they earn to have little debt.
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