Current liabilities in the financial statements
Current liabilities is a balance-sheet line item: a balance at a date, with a credit balance in the ledger. Metrics read it as a positive number, although the ledger stores credits as negative amounts.
Current liabilities in Business Central
How the accounts are selected
- Category Current Liabilities (11) and every category below it
- Category Payroll Liabilities (12) and every category below it
- Plus 8 accounts assigned directly: 23850 Employees Payable, 26100 Accrued wages/salaries, 26200 Accrued Holiday pay, 26300 Accrued Pension costs, 26400 Accrued Interest Expense, 26500 Deferred Income, 26600 Accrued Contractual costs, 26700 Other Accrued Expenses and Deferred Income
29 posting accounts in total.
Posting accounts
- 20000 Liabilities
- 22000 Current Liabilities
- 23000 Tax Liabilities
- 24000 Payroll Liabilities
- 25000 Other Current Liabilities
- 26000 Accrued Expenses and Deferred Income
Metrics using current liabilities
- Cash Ratio: (Cash and cash equivalents + Short-term investments) ÷ Current liabilities
- Current Ratio: Current assets ÷ Current liabilities
- Net Working Capital: Current assets − Current liabilities
- Quick Ratio: (Cash and cash equivalents + Short-term investments + Trade receivables) ÷ Current liabilities
- Return on Capital Employed: EBIT ÷ (average total assets − average current liabilities)
- Working Capital Turnover (through another metric): Revenue ÷ average Net Working Capital