current liabilities: these liabilities must be paid in a
relatively short time, usually one year. Taxes are one example.
customs union: an organization of countries who agree
to promote free trade among members but to impose a com-
mon tariff on nonmembers. Best known is the European
Community of Common Market.
284
D
debentures: you need to trust in a company and its
strength to give this type of loan, which isn't backed by
collateral.
debt-to-net-worth ratio: also debt-equity ratio. To get it,
you divide liabilities by stockholders' equity. This is a general
measure of how safe creditors can feel about their loans.
Creditors often avoid lending to companies with a high
debt-equity ratio.
decentralize: to move parts of a government,
organization, etc., from one central place to several
different smaller ones.
default: failure to meet an obligation when it comes
due.
