Current Assets


Definition: Current Assets are all assets which are expected to be converted to cash, consumed, or sold within 12 months of the balance sheet date, or the company's normal operating cycle, whichever is longer. Typical CA include cash, cash equivalents, short-term investments, accounts receivable, inventory and the portion of prepaid liabilities which will be paid within a year.
Also called Liquid Assets or Short-term Assets. On a balance sheet, assets will typically be classified into CA and fixed assets.
The Current Ratio (total CA / total current liabilities) is used as an indicator of a company's ability to meet short-term obligations (liquidity).



More on current assets.
More on accounting and auditing: Accounting Cycle, Accounts Payable, Accounts Receivable, Amortization, Appreciation, more...


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