Short-term debt is a financial obligation a company has that is due in the current accounting year. It is also known as current liabilities and short-term liabilities. Accountants use these terms interchangeably. These are shown in the balance sheets of a company under the current liabilities section.
- Financial debts: These are money lent to expand the business. Most financial debts are long-term, but the ones that mature within 12 months are listed under short-term financial debts. One example is short-term bank loans.
- Operating debts: These are money borrowed to fund a company’s primary operational costs within the current accounting year. These include accounts payable, salaries, rents, commercial papers, and stock dividends.