{"id":28541,"date":"2023-10-13T13:42:33","date_gmt":"2023-10-13T13:42:33","guid":{"rendered":"https:\/\/swoopfunding.com\/ca\/?post_type=business-glossary&p=28541"},"modified":"2025-04-24T13:53:14","modified_gmt":"2025-04-24T13:53:14","slug":"current-liabilities","status":"publish","type":"business-glossary","link":"https:\/\/swoopfunding.com\/ca\/business-glossary\/current-liabilities\/","title":{"rendered":"Current liabilities"},"content":{"rendered":"

Definition<\/h3>\n

Current liabilities are financial obligations<\/a> and debts that a company is expected to settle within one year or within the normal operating cycle of the business. <\/span><\/p>\n

What are current liabilities?<\/h3>\n

This type of liabilities represent the portion of a company’s liabilities that are due in the short term.<\/span><\/p>\n

Common examples of current liabilities include:<\/span><\/p>\n

    \n
  1. Accounts payable<\/b><\/a>: These are amounts owed by a company to its suppliers or vendors for goods or services received on credit.\u00a0<\/span><\/li>\n
  2. Short-term debt<\/b>: This includes any loans, notes, or credit facilities<\/a> that are due for repayment within one year.<\/span><\/li>\n
  3. Accrued liabilities<\/b><\/a>: These are expenses that have been incurred but have not yet been paid.<\/span><\/li>\n
  4. Deferred revenue<\/b>: This represents payments received from customers in advance of goods or services being delivered. It is a liability until the product or service is provided.<\/span><\/li>\n<\/ol>\n

    Current liabilities, along with current assets<\/a>, form a critical component of a company’s working capital. Maintaining an appropriate balance between current assets and current liabilities is essential for managing cash flow<\/a> and short-term financial obligations.<\/span><\/p>\n

    Current liabilities are prominently featured in a company’s balance sheet<\/a>, providing a snapshot of its financial position at a specific point.<\/span><\/p>\n

    Distinguishing between current and long-term liabilities is essential for understanding a company’s financial health. Creditors and investors closely monitor a company’s current liabilities as part of their assessment of its financial stability and ability to meet short-term obligations.<\/span><\/p>\n

    Example of current liabilities<\/h3>\n

    Here’s an example of current liabilities for a fictional company, ABC Corporation:<\/p>\n