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Current assets

Assets expected to be converted to cash, sold or consumed within twelve months: cash, short-term investments, receivables, inventory and prepayments.

The list runs roughly in order of liquidity: cash-and-equivalents, then marketable-securities, then accounts-receivable, then inventory, then prepaid-expenses. The further down the list, the more assumptions stand between the number and actual cash.

Current assets minus current-liabilities is working-capital, and the ratio of the two is the current-ratio. Both are standard first checks on whether a company can survive a bad year.

Example: Northwind Tools reports $570M of current assets: $210M cash, $95M receivables, $265M inventory and nothing meaningful in prepayments after a supplier deposit was refunded.

Related: cash-and-equivalents, accounts-receivable, inventory, working-capital, current-ratio

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