Definition of Current liabilities:
Current liabilities are a company's short-term financial obligations that are due within one year or within a normal operating cycle. An operating cycle, also referred to as the cash conversion cycle, is the time it takes a company to purchase inventory and convert it to cash from sales. An example of a current liability is money owed to suppliers in the form of accounts payable.
Amounts due to be paid to creditors within twelve months.
Obligations such as deferred dividend, trade credit, and unpaid taxes, arising in the normal course of a business and due for payment within a year. Also called current debt.
Current liabilities are typically settled using current assets, which are assets that are used up within one year. Current assets include cash or accounts receivables, which is money owed by customers for sales. The ratio of current assets to current liabilities is an important one in determining a company's ongoing ability to pay its debts as they are due.
How to use Current liabilities in a sentence?
- Current liabilities are a company's short-term financial obligations that are due within one year or within a normal operating cycle.
- Examples of current liabilities include accounts payable, short-term debt, dividends, and notes payable as well as income taxes owed.
- It accomplishes this to the extent that it serves to bring down wage rates and prices and thus the dollar amount of current liabilities, which fall as the result of smaller outlays being made and thus smaller bills having to be paid.
- You need to always know what your current liabilities are so that you can budget out the rest of your business properly.
- Our business was on the line for its current liabilities that I knew we would have hard time paying.
- The current liabilities were so low that we felt we were able to take on more debt and leverage our business.
- Current liabilities are typically settled using current assets, which are assets that are used up within one year.
Meaning of Current liabilities & Current liabilities Definition