It is important for companies to know what they are owing others and the current liabilities can be a useful running indicator of how this amount changes through time. Usually presented as a balance sheet item, the current debt is the sum of all money that a company owes and are due within a year. Accounts payable, accrued liabilities and other debts are added up to calculate current liabilities.
For example…
Rod’s restaurant, The Great Greek’s current liabilities includes all their obligations in the upcoming year. This includes everything from rent for their premises, the big order of eggplants they just made, the interest payable on the loan with the bank and the repayment of the debt Rod has with his uncle who helped him start the business. All these add up to about $70,000, which is The Great Greek’s current liabilities.
