Notes Payable

Notes payable are written promies to pay a certain amount of money on a specific future date. They may arise out of purchases, financing or other transactions. Notes payable can be short–term or long–term. They can also be interest–bearing or zero–interest–bearing.

Learn how to analyze a balance sheet in terms of company's liquidity and solvency using financial ratios such as the current ratio, quick (or acid) ratio, debt to asset ratio and debt to equity ratio.