finance

HideShow resource information

fixed assets

  • premises, machinery, vehicles
  • the figure is what theyre worth on the balance sheet- they depreciate with time but that gets sorted with profit and loss account
1 of 4

current assets

  • last only a few months
  • listed in increasing order of liquidity (liquidity tells you how easy an asset is turnes into money)
  • stock is the least liquid: includes raw materials and finished products which the firm have spent money on but are still needed to be sold
  • debtors show the value of products sold that have not yet been paid for by customers (usually on credit)
  • cash is the most liquid- money hasnt been spent on anything yet.
2 of 4

current liabilities

  • bills the firm has to pay quick
  • payments needed to be masde within one year of the date on a balance sheet
  • creditors-money the firm owes to its suppliers.
  • money that doesnt belong to the firm as they have to pay it out soon: you take it away from current asset figures
3 of 4

net assets

  • current-current liabilities = net current assets
  • this is the working capital
  • net current assets+fixed assets=net assets; this is how much the firm would make if it sold all of its assets.
4 of 4

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Finance resources »