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Understanding current assets can sharpen your personal finances and help you find good investment opportunities. Discover current ratios and how to use them.
The difference between current assets and current liability is referred to as trade working capital. The quick ratio, or acid-test ratio, measures the ability of a company to use its near-cash or quick assets to extinguish or retire its current liabilities immediately. Quick assets are those that can be quickly turned into cash if necessary and ...
[5] Depreciation is the cost of the stock of capital assets allocated over their service lives in proportion to estimates of their service lives, net of maintenance and repair costs. [2] In theory, the service life used in determining the allocation is the physical life-the length of time it is physically possible to use the asset.
Sample current ratios. Let’s look at some examples of companies with high and low current ratios. You can find these numbers on a company’s balance sheet under total current assets and total ...
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.
Inventory appears as a current asset on an organization's balance sheet because the organization can, in principle, turn it into cash by selling it. Some organizations hold larger inventories than their operations require in order to inflate their apparent asset value and their perceived profitability.
Conventionally, (physical) capital assets held by a business for more than one year are regarded in annual accounting statements as "fixed", the rest as "circulating". In modern economies such as the United States, roughly half of the intermediate inputs bought or used by businesses are in fact services, and not goods.
Examples of Deferred Tax Assets. Deferred tax assets come in many forms. Here are some common examples. ... Deferred tax assets are recorded as non-current, or long-term, on balance sheets since ...