What makes up current assets

Certificates of deposit Money market accounts High-yield savings accounts Mutual funds Stocks and bonds. Current accounts receivable. Subscription services Recurring withdrawals for product delivery Bi-annual fees. Inventory and supplies. Prepaid expenses. Prepaid rent Insurance payments. How to calculate current assets.

Add up all cash and cash equivalents. Combine all short-term investments. Find the total of current accounts receivable. Add up all inventory, supplies and prepaid expenses.

Financial ratios that use current assets. Current ratio measures a company's ability to pay off short-term obligations by considering the current assets relative to the company's current liabilities. To find the current ratio, divide the current assets by the current liabilities. Quick ratio measures the likelihood of a company to fulfill short-term obligations with cash, cash equivalents, accounts receivable and any marketable securities.

To calculate the quick ratio, add all current and long-term assets and divide by the total liabilities. Examples of current assets. With Example and FAQs. Related View More arrow right. Find out what churn rates and retention rates are, how they differ from one another, how to calculate each one with examples and tips for improving both.

Current Assets. Petty cash. Checking account funds. Treasury bill. Short-term investments. Total short-term investments. Accounts receivable. Membership fees per month. VAT reg no Main menu. Subjects Shop Courses Live Jobs board. View shopping cart. View mytutor2u. Account Shopping cart Logout. Explore Business Business Search. Explore Blog Reference library Collections Shop. Share: Facebook Twitter Email Print page. The main elements of current assets are: Inventories Inventories often also called "stocks" are the least liquid kind of current asset.

Trade and other receivables Trade debtors are usually the main part of this category. Short-term investments A business with positive cash balances can either hold them in the bank or invest them for short periods — perhaps by placing them on short-term deposit. Our subjects Our Subjects. Long-term investments, such as bonds and notes, are also considered noncurrent assets because a company usually holds these assets on its balance sheet for more than a year.

Current assets generally not subject to revaluation—though in certain cases, inventories subject to revaluation. Financial Statements. Business Essentials. Corporate Finance. Tools for Fundamental Analysis.

Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.

I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Accounting Basics. Accounting Theories and Concepts. Accounting Methods: Accrual vs. Accounting Oversight and Regulations. Corporate Accounting. Public Accounting: Financial Audit and Taxation. Accounting Systems and Record Keeping. Accounting for Inventory. Current Assets Equal to cash or will be converted into cash within a year Used to fund immediate or current needs Items like cash and cash equivalents, short term investments, accounts receivables, inventories Valued at market prices Tax implications: Selling current assets results in the profit from trading activities Current assets generally not subject to revaluation—though in certain cases, inventories subject to revaluation.

Article Sources. Investopedia requires writers to use primary sources to support their work.