Current liabilities are the short-term financial obligations of a business that are due within one year.
Primary Implication
If your current liabilities exceed current assets and you are concerned about getting paid the money owed to you, then you have a severe problem. Correct this business problem through the application of the Business CPR™ Management System. The proven way to improve cash flow from profits so you don’t owe more than you make.
Overview
Current Liabilities are a company’s debts or obligations due within one year. They are settled by using a Current Asset, such as Cash, or by creating a new Current Liability.
Current Liabilities appear on a company’s Balance Sheet and include short-term debt, Accounts Payable, Accrued Liabilities, and other similar debts. They can significantly impact your ability to manage your cash flow generation.
Your business is at risk anytime Cash Outflows associated with your Current Liabilities are close to exceeding the Cash Inflows associated with your Current Assets. You protect your business by avoiding any additional debt that you are not adequately capitalized with cash reserves to meet should a business downturn or emergency arise.
Adopt the Business CPR™ Management System to improve cash flow from profits so you don’t owe more than you make.