Obligations due within one year, such as accounts payable and short-term debt.
For example, a catering company's current liabilities include $22,000 in supplier invoices due within 30 days, a $15,000 credit card balance, and $8,000 in accrued payroll — totalling $45,000 that must be paid within the next 12 months.
Why it matters: These are immediate obligations that must be met within a year; failing to cover them leads to insolvency and distressed borrowing.
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