CNET.com - "Why Microsoft Should Aquire Sony's Gaming Division"

[NJ5]

Pristine20 said:

NJ5 said:
@Pristine20: http://www.wisegeek.com/what-is-liability.htm

"In accounting terms, liability describes an obligation. It refers to money owed to complete a transaction, debt that has yet to be paid, or products or services that have been paid for but have not yet been rendered."

"Some other examples of liability include money that is yet to be paid out, such as benefits from a life insurance policy or a settlement, either one of which represents a liability for the insurance provider. An employee's pension, as well as any other savings or retirement fund, is also considered a liability for a company. For the consumer, liabilities may include a home mortgage, second mortgage, line of credit, lien of any kind or car payment. Of course, for the entity to which these monies are owed, each item generally represents an asset. "

 

 I guess it make sense that buying the company also means buying the right to pay employee salaries and the like so since sony has way more employees and made less profit than nintendo, then, sony would be cheaper because whoever buys it has to pay off such things, hence, ExxonMobil has the highest market value because its the most profitable company in the world.

Absolutely... It's a very complicated thing to estimate a company's net worth, which is why the stock market goes up and down all the time. The market cap. usually gives a reasonable estimate though (except when there are huge bubbles from speculators and situations like that).