[1][better source needed] The normal operation period is the amount of time it takes for a company to turn inventory into cash.
[2] On a classified balance sheet, liabilities are separated between current and long-term liabilities to help users assess the company's financial standing in short-term and long-term periods.
Long-term liabilities give users more information about the long-term prosperity of the company,[3][better source needed] while current liabilities inform the user of debt that the company owes in the current period.
In addition, the specific long-term liability accounts are listed on the balance sheet in order of liquidity.
[1][better source needed] If a liability is currently due in fewer than twelve months and is in the process of being refinanced so that it is due after a year, then a company can record this debt in long-term investments.