On platforms like Dividend Data, you can find Total Current Liabilities for stocks. This helps you make informed investment decisions.
Definition:
Total Current Liabilities represent all the debts and obligations that a company is expected to pay within one fiscal year. These liabilities are essential for understanding the company's short-term financial health and its efficiency in managing cash flows.
Components of Total Current Liabilities
Common elements of Total Current Liabilities include:
Accounts Payable: Money owed to suppliers for goods or services.
Short-Term Debt: Any borrowings or loans due within the next year.
Accrued Liabilities: Expenses that have been incurred but not yet paid.
Deferred Revenue: Income received for goods or services to be delivered in the future.
Current Portion of Long-Term Debt: The part of long-term obligations due within the current year.
Importance of Total Current Liabilities in Financial Analysis
Liquidity Measurement: Helps determine a company’s ability to cover its short-term obligations with current assets.
Credit Risk Assessment: High levels of current liabilities may indicate potential liquidity problems or higher credit risk.
Operational Insight: Provides insights into a company's operational efficiency and financial management.
Total Current Liabilities in Financial Ratios
Current Ratio: Total Current Assets divided by Total Current Liabilities, assessing liquidity.
Quick Ratio: A more stringent liquidity test, excluding inventory from current assets.
Factors Influencing Total Current Liabilities
Business Model: Certain business models inherently carry higher current liabilities.
Seasonal Variations: Some businesses experience seasonal fluctuations affecting their liabilities.
Management Strategies: Decisions related to inventory management, credit terms, and debt financing.