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DEFINITION of 'Current Liabilities'
A company's debts or obligations that are due within one year. Current liabilities appear on the company's balance sheet and include short term debt, accounts payable, accrued liabilities and other debts.
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BREAKING DOWN 'Current Liabilities'
Essentially, these are bills that are due to creditors and suppliers within a short period of time. Normally, companies withdraw or cash current assets in order to pay their current liabilities.
Analysts and creditors will often use the current ratio, (which divides current assets by liabilities), or the quick ratio, (which divides current assets minus inventories by current liabilities), to determine whether a company has the ability to pay off its current liabilities.
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RELATED FAQS

What items are considered liquid assets?
A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >> 
What are working capital costs?
Working capital costs (WCC) refer to the costs of maintaining daily operations at an organization. These costs take into ... Read Full Answer >> 
Can a company's working capital turnover ratio be negative?
A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >> 
Does working capital include shortterm debt?
Shortterm debt is considered part of a company's current liabilities and is included in the calculation of working capital. ... Read Full Answer >> 
Why is working capital management important to a company?
Proper management of working capital is essential to a company’s fundamental financial health and operational success as ... Read Full Answer >> 
Does working capital include salaries?
A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >> 
What is the formula for calculating working capital in Excel?
Working capital is used in fundamental analysis to determine a company's financial health and efficiency in the shortterm. ... Read Full Answer >> 
What types of future events are taking into account for contingent liability?
Contingent liabilities are potential liabilities that a company may incur that are dependent on the outcome of future events ... Read Full Answer >> 
What is the difference between the operating the operating cash flow ratio and operating ...
The operating cash flow ratio and the operating cash flow margin are different ratios used in fundamental analysis. The operating ... Read Full Answer >> 
How can I calculate the cash ratio of a company in Excel?
The cash ratio determines a company's ability to pay back its current liabilities, or shortterm debt, using only its cash ... Read Full Answer >> 
How can I calculate the operating cash flow ratio on Excel?
The operating cash flow ratio measures a company's shortterm liquidity by relating its operational cash flow to its current ... Read Full Answer >> 
What does the operating cash flow ratio measure?
The operating cash flow ratio measures a company's ability to meet its shortterm, or current, liabilities, also known as ... Read Full Answer >> 
What is the difference between the cash ratio and the solvency ratio?
The main difference between the cash ratio and the solvency ratio is that the cash ratio is a liquidity measure that only ... Read Full Answer >> 
What is the relationship between the cash ratio and liquidity?
The relationship between the cash ratio and liquidity is that the cash ratio is one of three liquidity ratios used to compare ... Read Full Answer >> 
What are some alternative liquidity ratios to the cash ratio?
There are other liquidity measures that can be used as an alternative to the cash ratio, including the current ratio and ... Read Full Answer >> 
What does the cash ratio of a company measure, and how does it affect decision making?
The cash ratio of a company is used to measure the company's ability to pay off all of its current liabilities with only ... Read Full Answer >> 
What kinds of liabilities appear on the balance sheet?
The balance sheet consists of both current and noncurrent liabilities, which are the debts or obligations that the company ... Read Full Answer >> 
How do I calculate current liabilities in Excel?
Current liabilities are debt obligations that are due within one year. Some examples of current liabilities that appear on ... Read Full Answer >> 
How do you calculate net current assets in Excel?
The value of net current assets, or working capital, helps to gauge a company's shortterm financial health. If you are working ... Read Full Answer >> 
What are some examples of current liabilities?
The current liabilities of a company consist of debt obligations that are due within one year and as such, play an important ... Read Full Answer >> 
What is the short/current longterm debt account on a company's balance sheet?
A lot of confusion can arise with this balance sheet account. After all, how can something be both long and short? Despite ... Read Full Answer >>