Current liabilities are financial obligations that a company is expected to settle within one year or within its operating cycle, whichever is longer. These obligations typically include items such as accounts payable, short-term loans, and accrued expenses. They are crucial for assessing a company's short-term financial health and liquidity. Managing current liabilities effectively is essential for maintaining smooth operations. Companies must ensure they have enough current assets, like cash or inventory, to cover these obligations when they come due. This balance helps prevent financial distress and supports ongoing business activities.