In financial statements, what is the term for obligations owed by a company?

The term for obligations owed by a company is "liabilities." In financial statements, liabilities represent the amounts that a company owes to external parties, including creditors, suppliers, and lenders. These obligations can take various forms, such as loans, accounts payable, and mortgages, among others.

Liabilities are an essential part of the balance sheet, where they are typically classified into current liabilities (which are due within one year) and long-term liabilities (which are due beyond one year). Understanding liabilities is crucial for assessing a company's financial health, as they indicate the level of debt a company carries and its ability to meet its short- and long-term obligations.

Assets refer to what the company owns, such as cash, inventory, and property. Capital generally denotes the initial funds invested by the owners in the business. Equity represents the residual interest of the owners in the assets of the company after deducting liabilities. Thus, while assets, capital, and equity relate to different aspects of a company's financial structure, liabilities specifically denote the obligations that need to be satisfied.