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

Current assets are enterprise funds, 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 production assets, 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 register. Other current assets are the value 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 and variable share of current assets is allocated. The constant part is a share that does not depend on seasonal and various other leaps in the production activity of the company and is not associated with the creation of stocks of commodities 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 sold and are a ready-made means of payment - money.
• Highly liquid current assets, which can be transferred to money without hindrance and very quickly (up to one month) 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.
• Slaboklididnye current assets, which can be converted 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.
• Illiquid current assets - this is something that can not be converted into money independently. 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.

The nature of the origin of financial sources is allocated by 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.