This glossary uses Visual Finance™ to bring financial terms to life. Each example shows data from the Round Number Company, a fictional business with simplified figures to make learning easier. For more details, visit 'How to Read Visual Finance'.
Assets include anything that is owned and controlled by the business.
Current Assets include Cash, and things that can be expected to easily convert to cash: Receivables, Inventory, Prepaid Expenses and Short-Term Investments.
Fixed Assets include Property, Plant & Equipment, Intellectual Property, Goodwill, Long-Term Investments and other assets that have a more ‘permanent’ nature; they are intended to be held for the long term, not ‘turned over’ in the normal business cycle.
Balance Sheet Equation:Total Assets = Total Liabilities + Equity |
See also Current Assets and Fixed Assets.
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.