Investing term
What is Current liabilities?
Bills the company has to pay within a year — accounts payable, short-term debt, accrued expenses.
Current liabilities are the bills a company must pay within a year — money owed to suppliers, short-term debt, wages, and accrued expenses. They're weighed against current assets to judge short-term financial health. A company whose current liabilities exceed its current assets may face a cash squeeze even if it's profitable on paper.
For example
If a company owes $2M to suppliers and $1M in short-term debt this year, that's $3M of current liabilities it needs cash or current assets to cover.
Current liabilities is taught hands-on in Stage 14 — Reading Financial Statements.
See the lesson →