Monday, August 3, 2009

What is the difference between debt securities and equity securities?

and how are they presented on the balance sheet...





All my books says is that a debit security is a form of ownership





and debt is form of borrowing

What is the difference between debt securities and equity securities?
Equity represents ownership and debt represents a loan.
Reply:Simply stated, debt securities represent indebtedness or borrowing by the issuing company. On the other hand, equity securities represent ownership of the issuing company.
Reply:Your books are correct: debt = borrowing, equity = ownership. Both are forms of financing and are on the right hand side of the balance sheet (on the left are various assets). The left side of the balance sheet is WHAT a company has, the right side is HOW the company paid for that stuff. Makes sense? So for a typical family that owns a home, the left side of the balance sheet contains assets like a home, cars, investments, etc; while the right hand side shows how they paid for that stuff: a mix of debt (mortgage, credit card debt) and equity (down payments on house and cars, mainly). HeavyD
Reply:debt securities equal Bonds


debt securities equal loans


equity securities = shares= common stocks
Reply:Debt securities are usually bonds. And equity securities are securities that are secured by equity in the company, or more commonly known as stock.


No comments:

Post a Comment

Post a Comment