The definition of "current assets of the enterprise" implies many financial resources of the organization, providing the formation and circulation of fixed assets. In other words, this concept characterizes a continuously moving set of assets. Thus, all current assets can be divided into two categories:
1. Production assets.
2. Funds circulation.
Each of these components is responsible for certain areas. For example, the first group can be considered as objects of labor used during the turnover of one production cycle. This can also include unfinished products, raw materials, auxiliary materials and components, etc. The costs of the tools and tools used are fully transferred to the value of the output. Of course, the formation of working capital of the enterprise occurs at the expense of the second group. It includes all the means that are interconnected with auxiliary and serving processes of goods circulation. This category can rightly include both products released but not yet paid by customers, as well as financial funds credited to accounts in various banks. The most striking example of this kind can be finished goods produced by the enterprise, or the complex of services provided by the organization.
Thus, the working capital of an enterprise is a monetary asset that has been advanced in one of the two categories described above. It should also be noted an important feature of the funds presented: as mentioned earlier, they certainly participate in the production process, and their cost is fully compensated by the released goods and services.
Working capital of an enterprise is a group of assets that can traditionally be conditionally divided into three main parts:
1. Semi-finished products.
2. Inventories.
3. deferred expenses.
In addition, current assets of the enterprise are two categories allocated depending on the source of formation. Thanks to this classification, borrowed assets and own stocks are allocated. At the same time, it must be remembered that if the second group is a fairly understandable structure, then the characteristics of the first can cause some difficulties. So, the working capital of the enterprise is loans issued by the bank, as well as
accounts payable.It should be noted that some of the categories of working capital are subject to rationing. This group includes: stocks of finished products, work in progress and balances from previous periods, also stored in the enterprise’s warehouse. All other elements and articles of revolving funds do not need rationing. This traditionally includes unloaded, but not yet paid by customers products, as well as cash that is at the cash desk throughout the day, and others.
Allocate the concept of current assets. This term represents the funds that are used during the normal operating cycle or are repaid during the year.