Assets and liabilities are two terms that most business owners are familiar with, but many are not aware of the concept that assets should always be kept lower than liabilities. Simply put, this means that for every dollar a company has in assets it should have more than one dollar in liabilities – ideally more like 1.2 or 1.3 dollars in liabilities. This ensures that the company has enough equity to handle unexpected costs or unplanned expenses. To maintain this balance, businesses must take an active role in monitoring their assets and liabilities, paying down debt when possible, and ensuring that they don’t get overextended financially. Taking these steps allows companies to stay lean, agile, and efficient in the face of economic changes.