The personal property of a company that is presented in tangible, monetary or intangible terms is called an asset. Depending on the sources of formation, such objects have different liquidity. Net assets are valuables purchased from equity, and borrowed funds are usually used to purchase gross.
What role do company assets play?
Material assets include fixed assets of the enterprise, buildings for various purposes, equipment for the production line, stocks and raw materials. These objects have a material form and participate in the formation of the cost of goods due to depreciation and full write-offs.
Monetary assets of a company are current assets that are at the personal disposal of the company. This type of value includes the contents of bank accounts, cash on hand, securities and even receivables. Quite often, companies have the right to certain patents, trademarks or logos. Such intellectual property belongs to the category of intangible assets.
Non-current and current assets of the company
If we consider the degree of participation of material assets in the production process, then we can divide all assets into two groups: current and non-current.
- Such objects, which in the course of economic activity are completely spent on the production of certain goods or services, are called negotiable. The value of assets plays a direct role in the formation of cost.
- Values participating in several production cycles by partially transferring their value to the goods are called non-negotiable.
Separation of assets depending on the sources of formation and degree of liquidity
Assets of the company can be formed on the basis of own and borrowed funds. Values purchased with one's own money are called net assets, and objects purchased with borrowed funds are considered to be gross. In terms of liquidity, assets can also be different. Objects that can quickly turn into money are the most liquid and have great value in terms of profit.
According to the rules of the economy, assets are distributed as they become financially significant, from a larger to a lower value. For example, the first articles reflect cash, then receivables and inventories follow, and the last group includes deferred expenses and fixed assets.
Such a grouping is relevant enough to determine the financial stability of a company in a difficult economic situation. In the event of bankruptcy of an enterprise, assets must fully cover arrears. In addition, when considering an application for a loan, banks rather carefully analyze the profitability and solvency of the company.
Trying to deal with the question of what assets are, you first need to remember the following thing: whatever material values, they should be converted into cash as efficiently as possible. Newly acquired assets can be invested in further business development, aimed at implementing new projects and improving working conditions.
What are the benefits of intangible assets
Let's try to figure out what are assets called intangible. Until recently, such a concept did not exist at all in the terminology of Russian business. With the manifestation of innovative technologies and software products, a term such as intangible assets of a company has become quite often used in the formation of the cost of goods. The notional value of intellectual property was attributed to depreciable amounts. When conducting business in the field of trade and the provision of services, concepts such as know-how, copyrights, goodwill have acquired the status of values that characterize the general financial condition of the company.
For professional management of all enterprise resources, it is necessary to know well enough how the company’s assets are converted into cash. Proper regulation will help bring the company maximum profit and avoid unwanted bankruptcy.