Current liabilities

Liabilities that are to be settled in less than a year are called current liabilities. These include trade creditors and debt due within an year (including debt repayable on demand such as overdrafts). Current liabilities are one of the major groups of items on the balance sheet.

Current liabilities are very important in gauging a company's financial health as the company needs to have the money to meet these commitments in the short term — see current asset ratio and quick assets ratio.

Copyright © 2005-2016