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    The Importance of Current and Long Term Liabilities to Users

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    Why are current and long-term liabilities important to internal users such as management and external users such as investors and creditors?

    © BrainMass Inc. brainmass.com October 10, 2019, 5:03 am ad1c9bdddf
    https://brainmass.com/business/accounting-for-liabilities/importance-current-long-term-liabilities-users-490165

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    Current and long term liabilities are important to users of the company's financial statements because they are used to properly assess a company's liquidity (current assets) and various debt ratios, which rely on both current and long term assets. Management will use the liabilities section of the balance sheet from an internal standpoint to analyze if additional cash will be needed in order to meet current obligations. Management also closely ...

    Solution Summary

    Why are current and long-term liabilities important to internal users such as management and external users such as investors and creditors?

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