Colgate is a $16.7 billion consumer products company that serves people around the world with well-known brands that make their lives healthier and more enjoyable. ("Colgate at A Glance", 2013) The total current and annual liabilities were for the year end for Colgate were $3,736,000 for 2012, $3,716,000 for 2011 and $3,728 for 2010. Liabilities are a company's legal debts or obligations that arise during the course of business operations. Liabilities consist of the company’s assets less the stockholder’s equity. Liabilities are settled over time through the transfer of economic benefits including money, goods or services. (Investopedia, 2013).

Potential creditors, investors, and employees use the balance sheet and income statement to evaluate the company’s financial profile. The information detailed in the reports reveal the condition of the company’s finances and is used to measure the various financial aspects of the company at a particular period. Management uses this information to forecast and plan ahead and project future goals. This information gives creditors and stockholders important information that they allows them to determine whether or not credit should be extended, whether goods should be supplied as well as the probability of the returns on investments. All of these things contribute to a company’s efficiency and lets them know how they should handle their debts. Being able to understand how each liability impacts things and the