Question
What does current assets mean?
Answers
GPT-4o mini
Current assets refer to a company's assets that are expected to be converted into cash or used up within one year or within a normal operating cycle, whichever is longer. These assets are important for assessing a company's short-term liquidity and financial health. Common examples of current assets include:
1. **Cash and cash equivalents:** Money in the bank or readily available funds.
2. **Accounts receivable:** Money owed to the company by customers for goods or services delivered.
3. **Inventory:** Goods and materials that a company keeps on hand for production or sale.
4. **Prepaid expenses:** Payments made in advance for goods or services to be received in the future, such as insurance or rent.
5. **Other short-term investments:** Investments that can be easily liquidated, such as stocks or bonds expected to be sold within a year.
Current assets are typically listed on a company's balance sheet and are crucial for evaluating its ability to meet short-term obligations and finance operations.
1. **Cash and cash equivalents:** Money in the bank or readily available funds.
2. **Accounts receivable:** Money owed to the company by customers for goods or services delivered.
3. **Inventory:** Goods and materials that a company keeps on hand for production or sale.
4. **Prepaid expenses:** Payments made in advance for goods or services to be received in the future, such as insurance or rent.
5. **Other short-term investments:** Investments that can be easily liquidated, such as stocks or bonds expected to be sold within a year.
Current assets are typically listed on a company's balance sheet and are crucial for evaluating its ability to meet short-term obligations and finance operations.