The number represents payables to vendors, partners, and employees made on credit and not yet paid. A company does have the ability to delay AP by increasing earnings and current assets in the short term. Shady accountants can be very powerful people, yet while putting off payables will create short-term highs, bills never go away. This account records accumulated obligations such as payroll, employee benefits, interest due, insurance payments, sales commissions and some forms of taxes. Accrued expenses are operating expenses that have been incurred and expensed on the income statements.
Management attempts to properly gauge expenses for the upcoming year and allots certain funds to it.
A rising number in this arena shows a lack of liquidity and is probably bad. Debt with a maturity of over a year, but which has a payment due in the next 12 months, thereby affecting current assets. I must say that for many investors the balance sheet is an enigma. During a frothy bull market, investors lose focus and forget that it is a free research report that provides the easiest assessment of a company. In fact, these balance sheet line items are critical for a company trying to scale and grow a stable debt-free business.