Finance / July 13, 2018 / Emmalynn Leach
Fixed costs are those costs incurred by a company which are unrelated to fluctuations in productivity or sales. Examples of fixed costs include insurance premiums and leases on property. Fixed costs should not be confused with variable costs, which do fluctuate in direct proportion to productivity levels.
Current liabilities are reported in order of settlement date separately from long-term debt on the balance sheet. Payables, like accounts payable, with settlement dates closer to the current date are listed first followed by loans to be paid off later in the year. This allows external users the ability to analyze the liquidity and debt coverage of a company. In other words, they can analyze how many debts will become due in the next year and whether or not the company will have enough short-term resources to pay these debts when they become due.
We Also Think You’ll Like