What are current liabilities?

Current liabilities refer to obligations that a business is required to settle within a short-term period, typically within one year. These liabilities are critical for understanding a company's short-term financial health and liquidity. They include items such as accounts payable, short-term loans, and other financial obligations that are due in the near term.

This classification is essential for financial statement analysis because it helps stakeholders assess whether the company can meet its immediate financial obligations and manage its cash flow effectively. Understanding current liabilities is crucial for investors, creditors, and management when evaluating a company's ability to sustain operations and meet short-term financial commitments.

The other options do not accurately describe current liabilities: long-term debts pertain to obligations due beyond one year, assets planned for sale do not involve liabilities at all, and expenses incurred in the following year do not imply immediate payment obligations.