Current liabilities are obligations and debts that a company expects to settle within one year or within the normal operating cycle of the business, whichever is longer. These liabilities represent short-term financial obligations that the company needs to fulfill as part of its ongoing operations. Common examples of current liabilities include:

1. **Accounts Payable:**
– This represents amounts owed by a company to its suppliers for goods or services that have been received but not yet paid for. It reflects the company’s short-term obligations to settle its payables.

2. **Short-Term Debt:**
– Short-term debt includes any borrowings or loans that the company needs to repay within one year. This might include short-term bank loans, lines of credit, or the current portion of long-term debt.

3. **Accrued Liabilities:**
– These are liabilities that have been incurred but not yet paid or recorded. Common accrued liabilities include accrued wages, accrued interest, and accrued taxes. They represent obligations that the company will settle in the near future.

4. **Income Taxes Payable:**
– This is the amount of income taxes that a company owes to tax authorities but has not yet paid. It represents a short-term tax obligation.

5. **Dividends Payable:**
– Dividends payable is the amount of dividends that a company has declared but not yet paid to its shareholders. It is a short-term liability that will be settled in the near future.

6. **Unearned Revenue:**
– Unearned revenue represents payments that a company has received in advance for goods or services that it has not yet delivered. As the company fulfills its obligations, it recognizes the revenue and reduces the unearned revenue liability.

7. **Other Current Liabilities:**
– This category may include various short-term obligations that don’t fit into the above categories. Examples may include short-term provisions, customer deposits, or other short-term liabilities.

The sum of these current liabilities gives the company’s total current liabilities. The total current liabilities represent the company’s obligations that are expected to be settled in the short term and are crucial for assessing the company’s short-term financial health.

The current ratio, calculated by dividing total current assets by total current liabilities, is a common liquidity ratio used by investors and analysts to evaluate a company’s ability to cover its short-term obligations. A higher current ratio indicates a better short-term liquidity position.

It’s important for a company to manage its current liabilities effectively to ensure that it can meet its short-term financial obligations. Failure to do so may lead to financial difficulties, affecting the company’s overall financial stability and creditworthiness.