Which of the following best describes a liability in a business?

A liability in a business refers to anything that a company owes to external parties, which can include loans, accounts payable, and other obligations that require future settlement. Identifying company debt as a liability is crucial because it represents the financial responsibilities that must be fulfilled in the future, often leading to cash outflows that impact the financial health of the business.

Current assets are resources expected to be converted to cash or used within a year, such as inventory or receivables, which do not represent what the business owes. Shareholder equity reflects the ownership interest in the company after liabilities have been deducted from assets, focusing instead on the value provided to the owners rather than amounts owed. Profit margin is a measure of profitability, calculated as the difference between sales and costs, showcasing financial performance rather than obligations. Therefore, company debt is the most accurate description of a liability in a business context, as it directly pertains to the owed financial commitments.