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Assets

Assets can be described as ‘all the things a company owns’, which can range from cash in the bank, to factories, to land and inventory. On a balance sheet, assets are divided into 2 categories: current assets, and non-current (or long-term) assets. Current assets are very liquid, meaning they can be converted to cash easily and used quickly to pay-off any debts. Non-current assets (long-term assets) are all other assets that can’t easily be converted to cash within one year. These assets include factories and land.

Examples of current assets are:

  • Cash and cash equivalents
  • Marketable securities (fancy word for stock and debt investments)
  • Accounts receivables (money customers owe the company)
  • Inventory
  • Prepaid expenses

Examples of non-current assets are:

  • Long-term investments
  • Fixed Assets – Property, Plant and Equipment (factories, land, machinery etc.)
  • Intangible Assets (such as goodwill or intangible assets)

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