Financial StatementsBeginner

Liabilities

Everything a company owes to outsiders.

Detailed explanation

Current liabilities (payables, short-term borrowings) are due within a year. Non-current liabilities include long-term debt, lease liabilities and provisions.

Why it matters

Shows how much of the business is funded by others and what must be repaid.

Key points

  • Current vs non-current.
  • Debt is only one kind of liability.
  • Compare against assets and cash flow.

Related terms

AssetsDebt-to-Equity RatioWorking Capital

More in Financial Statements

Income StatementRevenueCost of Goods SoldGross MarginEBITDAEBIT

Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.