Skip to content
GetProfitable
Search
Dictionary

Current liabilities

Obligations due within twelve months: trade payables, accrued expenses, short-term borrowings, the current portion of long-term debt and near-term deferred revenue.

This is the number a company has to fund out of current-assets over the next year. A large current portion of long-term debt is worth noticing: it is a refinancing event hiding in a routine line, and it feeds refinancing-risk.

Because current liabilities include free financing from suppliers, a company that stretches payment terms can look better on cash flow while quietly increasing the fragility of its supply chain.

Example: Northwind Tools shows $310M of current liabilities: $148M of payables, $72M of accrued wages and warranty, $60M of the term loan due next year and $30M of deferred revenue.

Related: accounts-payable, current-assets, current-ratio, short-term-debt, working-capital

Educational only, not advice. Spotted an error? Post in Site Feedback.