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The response addresses the queries posted in 525 Words, APA

What is a limited liability? Is it a plus, or a negative?
What is an IPO, and what role does this have in building equity?
Define operating cycle.

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The response address the queries posted in 685 words with references.
//First of all, we will discuss the financial term 'Limited Liability'. It is an essential part of the balance sheet in business. We will also discuss the presentation of the limited liability in the balance sheet of the Company.

Limited Liability

Under Limited liability a person or an organization has financial liabilities only up to a particular amount. In other words, limited liability protects the shareholders of a company. It does this by restricting their liabilities to their share's values even if the company has an additional amount of debt of that value. The shareholders of the company are not personally responsible for the debts of their company.

Limited liability has both positive as well as negative aspects of the business. Limited liability has an important role in the financial markets. Limited liabilities also help the stock holders to move away from the liabilities when the earnings of the organization are not sufficient to fulfill them. In this manner, it is in favor of the stockholders but not in favor of the company. This helps the companies to raise their ...

Solution Summary

The following posting discusses various finance-related problems. Concepts discussed include limited liability, IPO & operating cycle.