current assets

Definition

A balance sheet item which equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that could be converted to cash in less than one year. A company's creditors will often be interested in how much that company has in current assets, since these assets can be easily liquidated in case the company goes bankrupt. In addition, current assets are important to most companies as a source of funds for day-to-day operations.

Use current assets in a sentence

When the company presents its financial statement to investors every year, current assets are a very important item because it shows exactly how much capital the company has.

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current capital total cash