What are the total assets?
Total assets are everything that owns a company or individual. For the company, the total assets are listed in the balance sheet. These assets are awarded on the basis of their purchase prices, not at the current market value of assets.
Assets can usually be converted from a physical item to cash. The ease, when the asset can be converted into money, is called liquidity. Assets can take various forms, from real estate and investment securities to equipment and supplies. Cash also contributes to the sum of assets.
The total assets are listed in the balance sheet on the basis of their liquidity level, which is based on the speed that can be replaced for cash. The biggest assets can be found on the top of the financial shutter. These assets may include cash or short -term investments such as stocks and receivables, which are the means of owned business. Among the current assets is part of the supply. These are items that are expected to be sold and generate income within 12 months. Another group of assetsare long -term assets. These are items that would take the longest to convert to cash and include things such as real estate, trucks and other machines.
Intangible items also contribute to overall assets. For example, patents, trademarks and licenses are included in the sum of total assets. Investments such as stocks and bonds are also grouped among intangible assets. The company's website could be considered a tangible or intangible asset, depending on the region in which the company headquarters is located.
The total assets are by their very nature based on the purchase value of the item, so the price of many assets reflected in the balance sheet can be incomplete. This is because the market value of the asset, such real estate, can appreciate or depreciate value for a period of time. This change in value is not reflected in the price of the purchase value, which is the price given in the balance sheet. As a result, investors nIt always ems appreciating the company correctly and can be too positive or negative on the share unknowingly. The value recorded in the financial statements is the purchase value, so investors could be able to recognize the fact that, for example, part of the soil has appreciated the value over time.
The second part of the total assets in the balance sheet is obligations. In order for financial analysts to determine the net value of the entity's assets, the obligations must be deducted from the total assets. The result is known as its own capital.