What are current assets ?
About Me
- Fahad Hanif
- Hello! My name is Fahad Hanif, and I’m a web & graphic designer. I work with all kinds of web related technologies, including my CMS of choice WordPress, I’ve even dabbled with Logo and stationary Designing, however I primarily work on Front-end Web Development projects. I first started designing websites and logos in 2006, and what started as a hobby, has now become my choice of career. I’ve worked on many projects ranging in size of complexity; you can view a handful of them on my portfolio. I always make every effort to enforce web standards in my designs, and take extra care to ensure my sites are usable & functional from a user’s perspective.
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In accounting, a current asset is an asset on the balance sheet which can either be converted to cash or to used to pay current liabilities within 12 months. Typical current assets include cash, cash equivalents, short-term investments, accounts receivable, inventory and the portion of prepaid liabilities which will be paid within a year.
Operating cycle is the average time that is required to go from cash to cash in producing revenues.
On a balance sheet, assets will typically be classified into current assets and long-term assets.
The current ratio is calculated by dividing total current assets by total current liabilities. It is frequently used as an indicator of a company's liquidity, its ability to meet short-term obligations.
Current asset is a balance sheet account that represents the value of all assets that are reasonably 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 readily converted to cash.
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