Total Assets
Total assets include
current assets, long term investments, property, plant and equipment, and
intangible assets.
Importance of Total Assets
To show the actual picture
of the firm, a firm must keep track of total assets. As this is presented in
the balance sheet which is to show the economic strength of the firm to sustain
in the market, pay short term obligations and also long term obligation of the
firm. So, it is so much important to have a strong base of the firm by having
diversified assets in its portfolio of total assets.
Total Current Assets
Current assets are assets
that a company expects to convert to cash or use up within one year. Cash,
accounts receivables, supplies, short term investments, inventories, pre-paid
expenses are some of the common forms of current assets that are presented in
the asset section of balance sheet.
Importance of Total Current Assets
Every organization must
keep enough current assets in hand to pay all its short term obligations. If
for just a single day, a company fails to maintain that, it has to suffer for
longer period of time. Adequate current assets in hand indicate that the firm
is being operated as per it needs. Current asset is used to calculate current
ratio which helps to make important management decisions by comparing the ratio
with other year’s ratios and the current ratios of competitors of the firm.
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