What do we call obligations a company expects to settle within a year?

Current liabilities are obligations that a company expects to settle within a year from the balance sheet date. This classification is essential for assessing a company's short-term financial health, as it provides insight into how well the company can meet its immediate financial obligations.

Examples of current liabilities include accounts payable, short-term loans, and accrued expenses, which are all expected to be paid off relatively soon. Recognizing these obligations helps stakeholders understand the company's liquidity position and its ability to maintain operations without the need for additional financing or revenue generation.

In contrast, long-term liabilities represent obligations due beyond one year, equity financing pertains to funding provided by shareholders in exchange for ownership stakes, and deferred liabilities are obligations that the company has incurred but not yet recognized as an expense in its financial statements. Each of these categories serves a distinct purpose in financial reporting, but current liabilities specifically focus on the immediate financial responsibilities a company faces.