Current assets is the Foundation of the operating activities of the company

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2018-04-01 01:06:07

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Current assets were funds of enterprises, which are reflected in the balance sheet in the asset. Current assets – a concept describing the set of material values of the enterprise which serve industrial and commercial activity and is entirely consumed in one production and economic cycle. Working capital is classified according to several characteristics.

working capital assetsCurrent assets include production assets, the assets in circulation and other. Production current assets - raw materials, consumables, semi-finished products, spare parts, packagings and so on. They also include deferred costs and work in process. Assets in circulation - money that has already been invested in ready, but still unshipped products, accounts receivable and available funds on accounts and in cash. Other current assets - the value of damaged, missing, but not yet written off of inventories, the amounts of excise duties, which subsequently shall be subject to deduction, and more.

In terms of functioning allocate fixed and variable share of the current assets. Permanent part – a proportion which has according to seasonal and other increases in production activities of the company and is not associated with stockpiling inventories of seasonal storage. This is the irreducible minimum that a company needs for smooth functioning. Variable share – part of the assets that varies with seasonal fluctuations in the volume of production and sales, as well as the need to build seasonal stocks.

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current assets include

The level of liquidity release:

  • Current assets that are completely liquid. These include assets that do not need to implement and represent a means of payment – cash.
  • Highly Liquid assets that can easily and very quickly (up to one month) converted to cash without serious loss of market value. As a rule, short-term investments, accounts receivable and more.
  • Sredneplastichnye assets that are possible without significant losses to convert into cash in a period of up to six months. These include finished products and conventional receivables.
  • other current assetsSlabolikvidnyh current assets that can be converted to cash without loss of value after a long period of time (more than six months). This is a work in progress, semi-finished products and raw materials.
  • Non-liquid current assets - is something that can not converted to money on their own. They are to be implemented only as part of the company's property. It's costs deferred and uncollectable receivables, and more.

The origin of financial sources emit gross and net assets. Gross characterize the entire volume of assets formed at the expense of borrowed and equity capital. Net assets formed at the expense of long-term debt and equity capital. They represent the difference between amounts of current assets and current liabilities.


Article in other languages:

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DE: https://tostpost.com/de/news-und-gesellschaft/27-umlaufverm-gen-ist-das-fundament-der-betrieblichen-t-tigkeit-der-firma.html

ES: https://tostpost.com/es/noticias-y-sociedad/32-activos-corrientes-es-el-fundamento-de-la-actividad-operativa-de-la-em.html

KK: https://tostpost.com/kk/zha-aly-tar-o-am/30-aynalym-aktivter---b-l-rgetas-operaciyaly-firma-yzmet-n.html

PL: https://tostpost.com/pl/aktualno-ci-i-spo-ecze-stwo/33-aktywa-obrotowe---to-fundament-dzia-alno-ci-operacyjnej-firmy.html

PT: https://tostpost.com/pt/not-cias-e-sociedade/30-ativos-circulantes-a-base-operacional-de-uma-empresa.html

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UK: https://tostpost.com/uk/novini-ta-susp-l-stvo/32-oborotn-aktivi---ce-fundament-operac-yno-d-yal-nost-f-rmi.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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