Current and non current assets
Current and Noncurrent Assets
The balance sheet is actually a useful tool for companies. The balance sheet offers a rapid view at the financial position of the organization. The balance sheet shows the assets, debts, and equity of the business. More valuable, the balance sheet shows the existing assets of the organization, the noncurrent assets, and the order of liquidity. These 3 elements display interested parties the short-term investments, long-term investments, and the sequence from most liquid to least liquid.
Current Assets
Current assets are the assets detailed on the balance sheet which can be put on the market or else expended in the present year or operating cycle. An operating cycle is the typical time required to transfer cash to cash in generating revenues. Usually these assets incorporate accounts receivable, cash, cash equivalents, stock, prepaid accounts which will be used up in the operating cycle, and short-term investments. In most cases existing assets aren 't greatly profitable however provide safety and liquidity to the company’s operation. Existing assets are also defined as gross working capital.
A company’s lenders are usually interested in the quantity of existing assets the company owns since these assets can be liquidated in the case of collapse or bankruptcy. Moreover, the existing assets are very important since they offer a financial source for daily operations.
Noncurrent Assets
Noncurrent assets are the assets shown on the balance sheet which won 't be changed into cash in the operating cycle which is usually a year. Some noncurrent assets include: “Fixed Assets, such as real estate, machinery, and other equipment; Leasehold Improvements; Intangible Assets, such as goodwill, patents, and trademarks; notes receivable after one year; other investments; miscellaneous assets are some of the example of non- current assets . . Prepaid expenses (also called Deferred
The balance sheet is actually a useful tool for companies. The balance sheet offers a rapid view at the financial position of the organization. The balance sheet shows the assets, debts, and equity of the business. More valuable, the balance sheet shows the existing assets of the organization, the noncurrent assets, and the order of liquidity. These 3 elements display interested parties the short-term investments, long-term investments, and the sequence from most liquid to least liquid.
Current Assets
Current assets are the assets detailed on the balance sheet which can be put on the market or else expended in the present year or operating cycle. An operating cycle is the typical time required to transfer cash to cash in generating revenues. Usually these assets incorporate accounts receivable, cash, cash equivalents, stock, prepaid accounts which will be used up in the operating cycle, and short-term investments. In most cases existing assets aren 't greatly profitable however provide safety and liquidity to the company’s operation. Existing assets are also defined as gross working capital.
A company’s lenders are usually interested in the quantity of existing assets the company owns since these assets can be liquidated in the case of collapse or bankruptcy. Moreover, the existing assets are very important since they offer a financial source for daily operations.
Noncurrent Assets
Noncurrent assets are the assets shown on the balance sheet which won 't be changed into cash in the operating cycle which is usually a year. Some noncurrent assets include: “Fixed Assets, such as real estate, machinery, and other equipment; Leasehold Improvements; Intangible Assets, such as goodwill, patents, and trademarks; notes receivable after one year; other investments; miscellaneous assets are some of the example of non- current assets . . Prepaid expenses (also called Deferred
References: Investor Words. (2012). Retrieved from http://www.investorwords.com/?mbl=1 Investopedia.com. (2013). Retrieved from http://www.investopedia.com/