Current Assets
(sometimes also designated as exploitation
assets or even running assets) are all
companies’ assets that, in normal
situations, is converted into availabilities
(or ways of payment) in an equal or inferior
time extent in which lasts the exploitation
cycle. Is therefore different from the Fixed
Assets (or Investment Assets or even
Permanent Assets) whose purpose is the
production or support to the several
internal operations of the entity and not
its direct conversion into payment means.
The separation
of current assets relatively to the
remaining assets has special relevance in
the analysis of the companies’ financial
structure on a short term horizon, namely
the liquidity analysis. The cases in which
the current assets are not enough to cover
the liabilities of similar maturity (the
called short term liabilities), it’s said
that the company faces a liquidity problem
which can only be solved through the
conversion of fixed assets into current
assets or by the conversion of short term
liabilities into more stable capital like
the long term liabilities or even the
equity.
