Debt is any item (usually money) one person or business owes another. Debts carry the expectation of repayment, often with fees or interest. They can take several forms including loans, credit cards, margin accounts, and corporate debts like bonds.
Individuals and entities can use debt to make large purchases, like a house or new manufacturing equipment. Investors and corporations also leverage debt to purchase assets in the hopes of earning outsize profits. And when you invest in stocks, you may examine the underlying companies’ debts to gauge their financial stability.
