Let's see various possible Current Assets you can find in a Balance Sheet... as well as some operating and non-operating sub-typologies.
Current assets are assets that can be converted into cash or used up within a year or an operating cycle 🕕🕡
👀Let's see a list of some common current assets that you may find in a balance sheet...
🔹️Cash and cash equivalents
it includes cash on hand, bank deposits, and short-term investments.
▪️Operating: Petty cash, cash on hand, bank deposits, and cash held in special accounts for specific purposes (e.g., payroll, taxes, etc.).
▫️Non-operating: Cash held for investment purposes, such as short-term investments in stocks, bonds, or mutual funds.
🔹️Accounts receivable
these are amounts owed by customers for goods or services sold on credit.
▪️Operating: Trade receivables (i.e., amounts owed by customers for goods or services sold in the ordinary course of business), unbilled receivables (i.e., amounts earned but not yet billed), and advances to customers.
▫️Non-operating: Receivables from non-trade sources, such as tax refunds, insurance claims, or legal settlements.
🔹️Inventory
it comprises goods held for sale in the ordinary course of business, including raw materials, work in progress, and finished goods.
▪️Operating: Raw materials, work in progress, finished goods, and supplies used in production or sold in the ordinary course of business.
▫️Non-operating: Inventory held for investment purposes, such as precious metals or other commodities.
🔹️Prepaid expenses
which are payments made in advance for expenses that will be incurred in the future, such as rent, insurance, or taxes.
▪️Operating: Prepaid rent, prepaid insurance, prepaid taxes, and prepaid maintenance contracts related to the production or sale of goods or services.
▫️Non-operating: Prepaid expenses related to investments or financing activities, such as prepaid interest or loan fees.
🔹️Marketable securities
they are short-term investments that can be easily bought or sold in the market, such as stocks and bonds.
▪️Operating: Short-term investments in marketable securities that are part of the company's working capital, such as commercial paper, certificates of deposit, or government bonds.
▫️Non-operating: Long-term investments in marketable securities that are not part of the company's working capital, such as stocks or bonds held for investment purposes.
🔹️Short-term loans (made)
these are amounts due from borrowers that are expected to be collected within a year.
▪️Operating: Loans made to customers or suppliers in the ordinary course of business, such as short-term trade financing or working capital loans.
▫️Non-operating: Loans made to unrelated parties for investment purposes, such as short-term loans to other companies or individuals.
🔹️Notes receivable
they are promissory notes from customers or other parties that are due within a year.
▪️Operating: Notes receivable from customers or suppliers for the sale of goods or services in the ordinary course of business.
▫️Non-operating: Notes receivable from non-trade sources, such as loans made to other companies or individuals for investment purposes.
🔹️Accrued income
it's income that has been earned but not yet received, such as interest or rent.
▪️Operating: Accrued income from the sale of goods or services that have been delivered but not yet billed, such as work in progress or unearned revenue.
▫️Non-operating: Accrued income from non-trade sources, such as interest or dividends earned on marketable securities held for investment purposes.
🔹️Advances to suppliers
amounts paid in advance to suppliers for goods or services that will be provided in the future.
▪️Operating: Advances made to suppliers for the purchase of goods or services in the ordinary course of business.
▫️Non-operating: Advances made to suppliers or other parties for investment purposes, such as advances made to support real estate investment research.
🔹️Other current assets
any other assets that can be converted into cash within a year, such as prepaid advertising, deferred tax assets, or deposits.
▪️Operating: Other current assets related to the company's core business operations, such as prepaid advertising, customer deposits, or deferred tax assets.
▫️Non-operating: Other current assets related to investments or financing activities, such as deposits made for real estate purchases or advances made to acquire other companies.
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