Liabilities are financial obligations a company or individual owes to others, including loans, accounts payable, and mortgages. Managing liabilities is crucial for maintaining financial stability because it helps ensure that these obligations are met promptly, preventing default and maintaining good relationships with creditors. Proper management involves monitoring debt levels, scheduling timely payments, and negotiating favorable terms, all of which contribute to reducing financial risk. Effective liability management can also improve a company’s creditworthiness, lower borrowing costs, and free up resources for investment in growth opportunities, ultimately contributing to long-term financial success and sustainability.