What Are Current Liabilities?

By Matthew Frankel, CFP – Updated Dec 16, 2024 at 1:06 PM

Key Points

Current liabilities are debts due within a year, including accounts payable and short-term loans.
A high current ratio, above 1, suggests a company can meet short-term financial obligations.
Investors use current liabilities and current ratios to assess a company's financial health.

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A man studying a balance sheet. — Image source: Getty Images.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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Matt Frankel has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.