Current Maturities means, as of any date, any percentage of a person's long-term debt that would be classed as a current liability of that person under GAAP. Current maturities can therefore be thought of as that portion of an entity's long-term debt that must be paid within one year from the date of the financial statement.
They are calculated by taking the total amount of long-term debt and dividing it by the number of days in the year. The result is expressed as a decimal number (0.01 = 1%).
Current maturities should not be confused with short-term maturities which are debts that will be repaid within one year but which may be due at different times during the year. These amounts are also called "interest payments".
Short-term debts include bills that are due in less than a year such as the rent due this month or the interest payment on your credit card bill. Long-term debts include bills that are more than a year out such as a mortgage or college loan.
You can see on your balance sheet how much is currently owed by looking at the current portion of long-term debt. This is the part of the long-term debt that must be paid within one year from the date of the financial statement.
A current debt is an obligation that must be returned during the current period or the next year, whichever comes first. In other words, it is a short-term loan or long-term debt that will become due during the next 12 months and will need the payment of existing assets. Current debts include bills that are due in the next month such as rent and utilities. Other examples include orders from vendors for new products or repairs to existing products. Current debts should not be confused with capital expenditures, which are expenses required for the maintenance and improvement of a company's facilities and equipment. These costs are necessary to maintain the organization's competitive edge and should not be considered current obligations.
Current liabilities consist of three main categories: trade creditors, inventory and accounts payable. Trade creditors are companies that have been paid but not yet paid by their customers. For example, a company that sells products on credit would be considered a trade creditor until those customers paid them back. Inventory is property of a business used in production or sale before being shipped out or sold. It includes raw materials, work in process, and finished goods. Accounts payable are bills for services or products received but not yet paid for. These bills are held by businesses as collateral while they look for customers who will pay them. When accounts payable age six months without being paid, they are reported as overdue debt and entered into the equity portion of the balance sheet.
Corporate Long-Term Debt Maturity at the Present The part of a company's long-term debt that is due within the next 12 months is referred to as its current maturity. Any payment that must be returned beyond 12 months is classified as a long-term liability. As of September 30, 2014, the current maturity of corporate America's long-term debt was 96.4%. That means that for every $1,000 of long-term debt issued by corporations, only $96.40 is being paid back with interest this year.
The remaining 3.6% will be repaid in future years. About 82% of this year's repayment comes from industries related to agriculture, mining, and logging. This reflects the fact that these types of businesses have longer life spans than most and they are also more likely to be in trouble later on when they need to refinance their loans. The rest of the current maturity comes from industry sectors such as retail and consumer products, transportation, and health care.
In addition to current maturing debt, companies also have outstanding debt that will mature in future years. These include loans that are either scheduled or due to fall into line with a specific date without being paid off before then. For example, General Motors has debts that will mature in February 2015 and April 2016 but it also has other obligations that fall due on dates like July 15th or October 15th.