Current assets are the foundation of the operating activities of a firm

Current assets are the means of enterprises,which are reflected in the balance sheet in the asset. Current assets are a concept that characterizes the aggregate of material values ​​of an enterprise that serve industrial and commercial activities and are entirely consumed in a single production and economic cycle. Working capital is classified on several grounds.

Current assets include productionassets, assets in circulation and others. Production current assets are raw materials, consumables, semi-finished products, spare parts, containers, and so on. They also include deferred expenses and work in progress. Assets in circulation are means that have already been invested in ready-made, but still unloaded products, accounts receivable, as well as available funds in accounts and in the cash department. Other current assets are the cost of spoiled, missing, but not yet written-off inventories, the amount of excises that are subsequently subject to deduction, and more.

By the term of functioning, a constant andvariable share of current assets. The constant part is the share that does not depend on seasonal and various other leaps in the company's production activity and is not related to the creation of stocks of the TMC of seasonal storage. This is an irreducible minimum, which the enterprise needs for uninterrupted operation. Variable share is a part of assets that varies depending on seasonal fluctuations in the volume of production and sales of products, as well as on the need to create seasonal stocks of commodities.

According to the liquidity level:

• Current assets, which are absolutely liquid. These include assets that do not need to be realized and are a ready-made means of payment - money.
• High liquid assets that can bewithout hindrance and very quickly (up to one month) into money without serious losses from market value. As a rule, these are short-term investments, accounts receivable and other.
• Medium-liquid assets, which are possible without tangible losses to convert into money in a period of up to six months. These include finished products and ordinary receivables.
• Weak liquid liquidity assets, which are possibleconvert into money without cost losses after a long period of time (more than six months). This is a work in progress, semi-finished products and raw materials.
• Non-liquid current assets - this is something that can not beconverted into money yourself. They are subject to implementation only as part of the entire property complex. This is the cost of future periods, as well as bad debts and other.

By the nature of the origin of financial sourcesallocate gross and net assets. Gross indicators characterize the entire volume of assets formed at the expense of debt and equity. Net assets are formed at the expense of borrowed long-term and own capital. They represent the difference between the amount of current assets and short-term liabilities.

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