current assets

• Current Assets

https://store.theartofservice.com/the-current-assets-toolkit.html

Asset

1 The balance sheet of a firm records the monetary value of the assets owned by the

firm. It is money and other valuables belonging to an individual or business. Two major asset classes are tangible assets and intangible assets. Tangible assets contain

various subclasses, including current assets and fixed assets. Current assets include

inventory, while fixed assets include such items as buildings and equipment.


Asset Current assets

1 Current assets are cash and other assets expected to be converted to cash or consumed either in a year or in the

operating cycle (whichever is longer), without disturbing the normal operations

of a business. These assets are continually turned over in the course of a business during normal business activity.

There are 5 major items included into current assets:


Asset Current assets

1 The phrase net current assets (also called working capital) is often used

and refers to the total of current assets less the total of current

liabilities.


Asset Comparison : current assets , liquid assets and absolute liquid assets

1 Current assetsLiquid assetsAbsolute liquid

assets


Accounts receivable Bookkeeping

1 Account receivables are classified as current assets assuming that they

are due within one calendar year or fiscal year


Fixed asset

1 This can be compared with current assets such as cash or bank

accounts, which are described as liquid assets


Fixed asset

1 While these non-current assets have value, they are not directly sold to consumers and cannot be easily

converted to cash.


ExxonMobil - Ratios overview

1 Liquidity ratios show that both companies were financially stable, but Exxon was in a better

situation than Mobil. The Exxon’s current and quick ratios (0.57 and 0.91 correspondingly) were higher than the Mobil’s (0.48 and 0.67 correspondingly) and merged company had

significantly improved these results. Ratio of net current assets as a percent of total assets (i.e. working capital to total assets) was distorted after the merger (1.48) probably due to large

divestitures that followed the deal.


National security - National Security Act of 1947

1 The national valuables in this broad sense include current assets and national interests, as well as the

sources of strength upon which our future as a nation depends


Dentsply - History

1 Acquisitions in 2011 caused the value of long term debt to increase by 147% while total assets grew by

146% (current assets however decreased in value).

Acquisition/restructuring charges were one of the reasons net income

decreased 7.4%.


Intertemporal consumption

1 Drawing upon empirical studies of consumption, superannuation and

windfall gains they hypothesize that the MPC is close to one out of current

income, close to zero for future income and somewhere in between

with respect to current assets


Corporate finance

1 Working capital management is the management of the company's monetary

funds that deal with the short-term business_operations|operating balance of current assets and Current liability|current liabilities; the focus here is on managing cash, inventory|inventories, and short-term borrowing and lending

(such as the terms on credit extended to customers).


Corporate finance - Working capital management

1 Managing the corporation's working capital position to sustain ongoing business operations is referred

to as working capital management.See [ http://www.studyfinance.com/lessons/workcap/inde

x.mv Working Capital Management], Studyfinance.com; [

http://www.treasury.govt.nz/publicsector/workingcapital/chap2.asp Working Capital Management], treasury.govt.nz These involve managing the

relationship between a firm's Asset#Current assets|short-term assets and its Current liability|short-

term liabilities


Corporate finance - Working capital

1 Working capital is the amount of funds which are necessary to an organization to continue its ongoing business operations, until the firm

is reimbursed through payments for the goods or services it has delivered to its

customers.Security Analysis (book)|Security Analysis, Benjamin Graham and David Dodd

Working capital is measured through the difference between resources in cash or

readily convertible into cash (Current Assets), and cash requirements (Current Liabilities)


Corporate finance - Management of working capital

1 Chance, Louisiana State University These policies aim at managing the Asset#Current assets|current assets (generally cash and cash and cash equivalents|cash equivalents, Inventory|inventories and debtors) and the short term financing, such that cash flows and

returns are acceptable.[ http://www.qfinance.com/contentFiles/QF02/hbmpf5qp/12/0/best-practice-working-capital-management-techniques-for-optimizing-inventories-receivables-

and-payables.pdf Best-Practice Working Capital Management: Techniques for Optimizing Inventories, Receivables, and Payables], Patrick Buchmann and

Udo Jung


Studebaker - Impact of the 1930s depression

1 By 1933, the banks were owed $6 million, though current assets exceeded that figure


XBRL - Presentation Linkbase

1 These groupings can be performed in many ways. For example, a typical

Balance Sheet contains Assets, Equity and Liabilities. Assets consist of Current Assets and Non-current Assets. Current Assets are split in

Inventories, Receivables and so on. The presentation linkbase, using parent-child relations organizes

elements in this way and helps users find concepts they are interested in.


Balance sheet - Personal balance sheet

1 A personal balance sheet lists current assets such as cash in checking

accounts and savings accounts, long-term assets such as common stock and real estate, current liabilities such as loan debt and mortgage

loan|mortgage debt due, or overdue, long-term liabilities such as

mortgage and other loan debt


Balance sheet - US small business balance sheet

1 A small business balance sheet lists current assets such as cash,

accounts receivable, and inventory, fixed assets such as land, buildings,

and equipment, intangible assets such as patents, and liabilities such

as accounts payable, accrued expenses, and long-term debt


Balance sheet - Sample balance sheet

1 'Non-Current Assets (Fixed Assets)'


Balance sheet - Sample balance sheet

1 Other Non-Current Assets, e.g. Deferred Tax Assets, Finance lease|Lease Receivable


Solvency

1 'Solvency', in finance or business, is the degree to which the current assets of an individual or entity

exceed the Current liability|current liabilities of that individual or

entity.Zietlow 2007, p


Working capital management

1 Managing the corporation's working capital position to sustain ongoing business operations is referred to as working capital management.See

[http://www.studyfinance.com/lessons/workcap/index.mv Working Capital Management],

Studyfinance.com; [http://www.treasury.govt.nz/publicsector/workingcapital/chap2.asp Working Capital Management],

treasury.govt.nz These involve managing the relationship between a firm's Asset#Current

assets|short-term assets and its Current liability|short-term liabilities


Working capital

1 If current assets are less than current liabilities, an entity has a 'working capital deficiency', also called a

'working capital deficit'.


Working capital - Calculation

1 The basic calculation of the working capital is done on the basis of the gross current assets of the firm.


Working capital - Basic formula

1 *'working capital = Gross Current

assets'


Working capital - Basic formula

1 *'Net working capital = Current assets – Current liabilities'.


Working capital - Inputs

1 Current assets and current liabilities include three accounts which are of special importance. These accounts represent the areas of the business

where managers have the most direct impact:



1 *inventory (current assets), and



1 The current portion of debt (payable within 12 months) is critical, because

it represents a short-term claim to current assets and is often secured by long term assets. Common types of short-term debt are bank loans

and lines of credit.



1 An increase in net working capital indicates that the business has either increased current assets (that it has increased its receivables, or other current assets) or has decreased

current liabilities—for example has paid off some short-term creditors, or

a combination of both.


Working capital - Working capital management

1 Decisions relating to working capital and short term financing are referred to as working capital

management. These involve managing the relationship between a firm's Asset#Current

assets|short-term assets and its Current liability|short-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its Operations management|operations

and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming

operational expenses.


Working capital - Working capital management

1 A managerial accounting strategy focusing on maintaining efficient

levels of both components of working capital, current assets and current liabilities, in respect to each other.

Working capital management ensures a company has sufficient

cash flow in order to meet its short-term debt obligations and operating

expenses.https://store.theartofservice.com/the-current-assets-toolkit.html

Working capital - Management of working capital

1 Guided by the above criteria, management will use a combination

of policies and techniques for the management of working capital. The

policies aim at managing the Asset#Current assets|current assets (generally cash and cash and cash

equivalents|cash equivalents, Inventory|inventories and debtors) and the short term financing, such

that cash flows and returns are acceptable.


Cash flow statement - History and variations

1 Net Working Capital|Net working capital might be cash or might be the

difference between current assets and current liabilities


Cash flow statement - Rules (operating activities)

1 Cash Flows from Operating Activities can be found by adjusting Net

Income relative to the change in beginning and ending balances of Current Assets, Current Liabilities, and sometimes Long Term Assets



1 *Decrease in non-cash current assets

are added to net income



1 If the balances of all other current assets, long term assets and current

liabilities did not change over the year, the cash flows could be

determined by the rules above as $100 – $25 = Cash Flows from

Operating Activities = $75


Cash

1 In bookkeeping and finance, cash refers to current assets comprising

currency or currency equivalents that can be accessed immediately or

near-immediately (as in the case of money market accounts). Cash is

seen either as a reserve for payments, in case of a structural or incidental negative cash flow or as a way to avoid a downturn on financial

markets.https://store.theartofservice.com/the-current-assets-toolkit.html

Working capital management - Management of working capital

1 Chance, Louisiana State University These policies aim at managing the Asset#Current assets|current assets (generally cash and cash and cash equivalents|cash equivalents, Inventory|inventories and debtors) and the short term financing, such that cash flows and

returns are acceptable.[http://www.qfinance.com/contentFiles/QF

02/hbmpf5qp/12/0/best-practice-working-capital-management-techniques-for-optimizing-inventories-receivables-and-payables.pdf Best-Practice Working

Capital Management: Techniques for Optimizing Inventories, Receivables, and Payables], Patrick

Buchmann and Udo Jung


Fund accounting - Nonprofit organizations

1 * Current fund – unrestricted. This fund is used to account for current

assets that can be used at the discretion of the organization's

governing board.


Fund accounting - Nonprofit organizations

1 * Current funds – restricted use current assets subject to restrictions

assigned by donors or grantors.


Assets

1 Goodman, Dictionary of Finance Investment Terms, Baron's Financial Guides, 2003 Current assets include inventory, while fixed assets include such items as buildings and capital

equipment|equipment.J


Assets - Assets in accounting

1 Assets are listed on the balance sheet. In a company's balance sheet

certain divisions are required by generally accepted accounting

principles (GAAP), which vary from country to country.Intermediate

Accounting--Kieso, et. al Assets can be divided into e.g. current assets and fixed assets, often with further

subdivisions such as cash, receivables and inventory.


Nauru - Economy

1 However, because of mismanagement, the Trust's fixed and current assets were reduced

considerably, and many never fully recovered


Fundamental analysis - Procedures

1 The amount of debt also a major consideration in determining a

company's health. It can be quickly assessed using the debt-to-equity ratio and the current ratio (current

assets/current liabilities).


Philippine Airlines - Financial issues

1 As of March 31, 2007, other current and noncurrent assets fell by 29% to 2,960.4 million Philippine pesos and by 20% to 2,941.7 million Philippine

pesos “due to the effect of re-measurement to fair value of certain financial assets and derivative

instruments”.http://www.philippineairlines.com/Images/PHI-17Q-December%202007_tcm61-6305.pdf

After carrying 17% more passengers in 2009 due to acquisition of additional aircraft and growth in the local market, PAL annual income report showed raise in revenues amounted to US$1.634 billion

from US$1.504 billion in 2008


Circulating capital

1 Where the distinction is used, circulating capital is a component of (total) capital, also including fixed

capital used in a single cycle of production. In contrast to fixed

capital, it is used up in every cycle (raw materials, basic and

intermediate materials, combustible, energy…). In accounting, the

circulating capital comes under the heading of current assets.


Free cash flow - Alternative Mathematical formula

1 where Kt represents the firm's Invested Capital|invested capital at

the end of period t. Increases in non-cash current assets may, or may not be deducted, depending on whether

they are considered to be maintaining the status quo, or to be

investments for growth.


Financial management

1 It includes how to raise the capital, how to allocate it i.e. capital

budgeting. Not only about long term budgeting but also how to allocate

the short term resources like current assets. It also deals with the dividend

policies of the share holders.


International Time Recording Company - The merger

1 CTR had a bonded indebtedness of $6.5 million, three times its current

assets, of which $4 million was borrowed from the Guaranty Trust Company.Flint (1923) p.312-313 Flint assigned it a value of $17.5

million, while its tangible assets only added up to $1 million


Turner Broadcasting System

1 The company's current assets include CNN, HLN (TV channel)|HLN,

TBS (TV network)|TBS, TNT (TV channel)|TNT, Cartoon Network,

Adult Swim, Boomerang (TV channel)|Boomerang, TruTV and

Turner Classic Movies.


Peter Chernin - TCG

1 TCG’s current assets include Chernin Entertainment, an entertainment production company; a majority stake in CA Media, an Asia-based media investment company; and

several strategic investments in U.S. based technology and media

companies including Pandora_Radio|Pandora, Fullscreen (company)|

Fullscreen, Tumblr, and Flipboard.https://store.theartofservice.com/the-current-assets-toolkit.html

Vancity - Growth

1 Vancity first operated out of a former machine shop on the corner of Broadway and Quebec

streets in Vancouver. By the end of 1951, membership had reached 2,000. Assets grew rapidly after the introduction of transactional account|personal chequing accounts in the same year, reaching $5 million in 1962, $10 million in 1965, $100 million in 1973, and $1

billion by 1980. Current assets are $17.5 billion.https://www.vancity.com/AboutVancity/

VisionAndValues/History/Highlights/


Return on net assets - Basic formulae

1 where Working capital = (current

assets minus current liabilities)


Bayern München - Organization and finance

1 Other clubs often report losses, realizing transfers via loans, whereas

Bayern always uses current assets


Cousin marriage - Europe

1 Spain and Noricum were exceptions to this rule, but even there the percentages did not rise above

10%.#ShawSaller|Shaw 1984 They further point out that since property

belonging to the nobility was typically fragmented, keeping current

assets in the family offered no advantage compared with acquiring

it by intermarriagehttps://store.theartofservice.com/the-current-assets-toolkit.html

Fixed assets

1 'Fixed assets', also known as tangible assets Dyckman, Intermediate Accounting,

Revised Ed. (Homewood IL: Irwin, Inc. 1992),195. or 'property, plant, and equipment' (PPE), is a term used in

accounting for assets and property that cannot easily be converted into cash. This can be compared with current assets such

as cash or bank accounts, which are described as liquid assets. In most cases,

only tangible assets are referred to as fixed. https://store.theartofservice.com/the-current-assets-toolkit.html

Fixed assets

1 While these non-current assets have value, they are not directly sold to consumers and cannot be easily

converted to cash.


Current asset

1 Typical current assets include cash, cash equivalents, short-term

investments, accounts receivable, stock inventory and the portion of

prepaid liabilities which will be paid within a year.J


Current asset

1 On a balance sheet, assets will typically be classified into current assets and long-term

assets.


Current asset

1 The current ratio is calculated by dividing total current assets by total current liability|current liabilities. It is frequently used as an indicator of a

company's liquidity, its ability to meet short-term debt|short-term

obligations.


Notes receivable

1 'Notes Receivable' represents Cause of action|claims for which formal instruments of Credit (finance)|credit are issued as evidence

of debt, such as a promissory note. The credit instrument normally requires the

debtor to pay interest and extends for time periods of 30 days or longer. Notes

receivable are considered current assets if they are to be paid within 1 Luis Suarez|year,

and non-current if they are expected to be paid after one year.


Revaluation of fixed assets - Upward revaluation

1 The law in Australia has been amended recently to allow for the

payment of dividends from the increase in value of non-current

assets in certain instances where a company meets other liquidity tests

(see section 254T of the Corporations Act 2001 (Cth)).


Aldrich Ames - CIA response

1 By 1990, the CIA was certain that there was a mole in the agency and

recruitment of new Soviet agents came to a virtual halt from fear that

the agency could not protect its current assets.


Accounting liquidity - Calculating liquidity

1 * The current ratio is the simplest measure and calculated by dividing the total current assets by the total current liabilities. A value of over 100% is normal in a non-banking

corporation. However, some current assets are more difficult to sell at full

value in a hurry.


Accounting liquidity - Calculating liquidity

1 * The quick ratio is calculated by deducting inventories and

prepayments from current assets and then dividing by current liabilities, giving a measure of the ability to

meet current liabilities from assets that can be readily sold. A better way

for a trading corporation to meet liabilities is from cash flows, rather

than through asset sales, so;https://store.theartofservice.com/the-current-assets-toolkit.html

IFRS 5

1 'IFRS 5' refers to the International Financial Reporting Standards

relating to Non-current assets held for sale and discontinued operations.


Indian Accounting Standards - List of Indian Accounting Standards(IND ASs)

1 * Ind AS 105 Non current Assets Held for Sale and

Discontinued Operations *


IAS 16 - Overview

1 The standard does not apply to assets classified as held for sale in accordance with

IFRS 5|IFRS 5 Non-current Assets Held for Sale and Discontinued Operations and assets which require more specialised accounting,

such as biological (IAS 41|IAS 41 Agriculture), exploration and evaluation assets (IFRS 6|IFRS 6 Exploration for and Evaluation of Mineral Resources), mineral rights and

reserves such as oil, natural gas and similar non-regenerative resources.IAS 16.3


Statement of Cash Flows - History and variations

1 Net Working Capital|Net working capital might be cash or might be the

difference between current assets and current liabilities


Current liabilities

1 A more complete definition is that current liabilities are obligations that will be settled by current assets or by the creation of new current liabilities


Current liabilities

1 One application is in the current ratio, defined as the firm's current

assets divided by its current liabilities. A ratio higher than one means that current assets, if they can all be converted to cash, are more than sufficient to pay off

current obligations. All other things equal, higher values of this ratio

imply that a firm is more easily able to meet its obligations in the coming

year.


Quick ratio

1 In finance, the 'Acid-test' or 'quick ratio' or 'liquid ratio' measures the ability of a company to use its near cash or quick

assets to extinguish or retire its current liability|current liabilities immediately. Quick

assets include those current assets that presumably can be quickly converted to

cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently fully pay back its current

liabilities.https://store.theartofservice.com/the-current-assets-toolkit.html

Debt ratio

1 'Debt Ratio' is a financial ratio that indicates the percentage of a

company's assets that are provided via debt. It is the ratio of total debt (the sum of current liabilities and

long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'Goodwill (accounting)|goodwill').


Line of credit - Cash credit in India

1 In India, banks offer 'cash credit' accounts to businesses to finance their working capital requirements (requirements to buy raw materials or 'current assets', as opposed to

machinery or buildings, which would be called 'fixed assets')


Line of credit - Cash credit in India

1 Generally, a cash credit account is secured by a charge on the current

assets (inventory) of the organization. The kind of charge created can be either pledge or

hypothecation.[http://www.indiainbusiness.nic.in/investment/funding_optio

n.htm]


Current ratio

1 The 'current ratio' is a financial ratio that measures whether or not a firm has enough resources to pay its

debts over the next 12 months. It compares a firm's current assets to its current liabilities. It is expressed

as follows:


Current ratio

1 \mbox = \frac \mbox Current Assets

\mbox Current Liabilities


Current ratio

1 If the current ratio is too high, then the company may not be efficiently using its current assets or its short-

term financing facilities


ECache

1 The current assets backing eCache certificates are pure gold coins and the currency certificates are labeled

GG for “Gram of Gold”. A digital bearer certificate in the amount of 10GGs would have a value of 10

grams of gold.


German colonization of Valdivia, Osorno and Llanquihue - Economic impact

1 Most German settlers that arrived to Valdivia did so with current assets, machinery or other valuable goods


Nuffield Organisation - The British Motor Corporation Limited

1 ::Current assets £54.8 million


Nuffield Organisation - The British Motor Corporation Limited

1 :::Net current assets £26.8 million


Conrad N. Hilton Foundation - Financial information

1 The Foundation's current assets are approximately $2.2 billion. Since

inception, the Foundation has awarded more than $1 billion in

grants. Currently more than 50% supports international charitable

projects.


Strip clubs - Financial trends

1 Strip clubs which practice Generally Accepted Accounting Principles| Generally Accepted Accounting

Principles (GAAP) typically report negative working capital, where current liabilities exceed current

assets


SABIC - Fiscal performance

1 Net profits of SABIC in 2008 touched billion ( billion), while total assets

stood at billion ( billion) at the end of 2008 and the value of current assets at the end of 2008 stood at billion

( billion).[http://www.sabic.com/corporate/en/ourcompany/factsandfigures/

financialperformance.aspx SABIC.com] The Fortune 500 ranking

set SABIC revenues as of $40.2 billion.


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current assets

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total of current assets

noncurrent assets

fixed assets

intangible assets

ratio of net current

exxons current

percent of total assets

total of current liabilities