Investing term

What is Current assets?

Cash, receivables, inventory, and other assets the company expects to convert to cash within a year.

Current assets are the things a company expects to turn into cash within a year — cash itself, money owed by customers, inventory, and short-term investments. They're the liquid resources available to pay near-term bills. Compared against current liabilities, they reveal whether a company can comfortably cover what it owes in the coming year.

For example

A company with $3M in cash, receivables, and inventory has $3M of current assets ready to meet the bills coming due over the next twelve months.

Current assets is taught hands-on in Stage 14 — Reading Financial Statements.

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Related terms

Accounts receivable (A/R)Money customers owe the company for goods or services already delivered but not yet paid.AccrualsAccounting entries that record revenue or expense before cash actually moves.Annual reportThe yearly disclosure that includes audited financials, MD&A, and footnotes — the primary source for serious investors.Balance sheetThe 'photo' statement — what the company owns, what it owes, and what's left for owners, on a single date.
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