current assets

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current assets

A company's balance sheet lists cash and inventory as current assets.

Definition
  1. Noun:
    • Liquid resources of a business: "Current assets" are the resources owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business, whichever is longer. They represent the short-term financial resources available to meet obligations and fund day-to-day operations.
Usage
  • "Current assets" is a plural noun used in accounting and finance to categorize a specific part of a company's balance sheet.
  • It is typically used with verbs like , , , , and .
  • Example in a sentence:
Examples
  • Noun:
    • Cash, accounts receivable, and inventory are all classified as current assets.
    • The balance sheet shows that current assets increased by 15% this quarter.
    • A high ratio of current assets to current liabilities indicates good short-term financial health.
Advanced Usage
  • "Net current assets" or "Working Capital": This refers to current assets minus current liabilities. It measures a company's operational liquidity.
    • The management is focused on improving net current assets to ensure smooth operations.
Variants and Related Words
  • Current Liability (n): A company's financial obligations that are due within one year or the operating cycle. It is the counterpart to current assets on the balance sheet.
    • Accounts payable and short-term debt are common current liabilities.
  • Fixed Asset (n): A long-term tangible asset, such as property or equipment, not expected to be converted to cash within a year.
    • The factory building is listed as a fixed asset.
  • Liquid Asset (n): An asset that can be quickly converted into cash with minimal impact on its value. All liquid assets are current assets, but not all current assets are equally liquid.
    • Cash is the most liquid asset.
Synonyms
  • Liquid assets: Emphasizes the ease of conversion to cash.
  • Short-term assets: Emphasizes the time horizon (within one year).
  • Working assets: Emphasizes their role in daily business operations.
Related Phrases
  • Current Asset Turnover: A ratio measuring how efficiently a company uses its current assets to generate sales.
    • An improving current asset turnover ratio suggests better management of inventory and receivables.
  • Current Asset Ratio (Current Ratio): A liquidity ratio calculated as current assets divided by current liabilities.
    • A current ratio below 1.0 may signal potential liquidity problems.
current assets

A company's balance sheet lists cash and inventory as current assets.

Noun
  1. assets in the form of cash (or easily convertible into cash)

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