Current Assets

Current assets

Value of cash, accounts receivable, inventories, marketable securities and other assets that could be converted to cash in less than 1 year.

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Current Assets

Cash and other assets expected to be converted to cash within a year. Examples include accounts receivable, prepaid expenses, and many negotiable securities. Current assets are calculated on a balance sheet and are one way to measure a company's liquidity. Current assets tend not to add much to the company's assets, but help keep it running on a day-to-day basis. See also: Fixed asset, Gross working capital.

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Current Assets

What Does Current Assets Mean?

(1) A balance sheet account that represents the value of all assets that can reasonably be expected to be converted into cash within one year in the normal course of business. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other liquid assets that can be converted readily to cash. (2) In personal finance, current assets are all assets that a person can convert readily to cash to pay outstanding debts and cover liabilities without having to sell fixed assets. In the United Kingdom, current assets are also known as current accounts.

Investopedia explains Current Assets

(1) Current assets are important to businesses because they are the assets that are used to fund day-to-day operations and pay ongoing expenses. Depending on the nature of the business, current assets can range from barrels of crude oil, to baked goods, to foreign currency. (2) In personal finance, current assets include cash on hand, bank accounts, and marketable securities that are not tied up in long-term investments. In other words, current assets have value and can be converted to cash rather quickly (highly liquid).

Related Terms:
• Acid-Test Ratio
• Balance Sheet
• Cash and Cash Equivalents—CCE
• Current Liabilities
• Working Capital