Necessity for Current Assets to Draw Sufficient Attention of Company Owners


Assets are anything which is of value and is owned by a company irrespective of the fact that whether it is being fully paid for or not. The entire range of assets ranges from cash, inventory, and all other current assets to real estate, equipment, and fixed asset. There are even some intangible items which are of immense value to the company some of which include exclusive use contracts, copyrights and even patents, which are even considered as assets.

CAE Ryan Jacob has been dealing with these assets and helps all his clients in managing them. But before starting over with it, he believes that one must have a clear idea about how the entire industry of assets and liabilities work, and that will help in enhancing the effectiveness while trading with them. First, in the category comes to the soft and liquid assets which include cash, the securities provided by the government, the marketable securities, inventories, raw materials and all the items which could be converted into cash at any point of time in the accounting year.

Cash, of course, is considered to be the most liquid of all assets, but in the periphery of businesses, the definition of cash is not restricted to just respective currency. It even includes the checks, drafts, money orders and even the balance in any company account. Some other liquid assets which are not commonly regarded as cash equivalents but still fall under the category are the certificate of deposits, which are of maturity less than a year, the money market funds, and even the Treasury bills.

For the small and medium-sized businesses, the cash comprises a major portion of the current assets, for it can be quickly and easily converted into the goods and services for which it is needed. But there are flip sides to it. Since it can be so easily utilized for all the resources, it gets very attractive for the disreputable people to misuse it both within and without the business. As a result of it, most of the small and medium-sized business owners need to ensure that there is necessary and sufficient precaution already taken to that there’s no mishandling of this particular liquid asset.

Most of the companies, who avail consultants in order to have a better operation of the business, are often asked to have some insurance policies which will help them in protecting during the huge financial loss, and this particular practice has been termed as bonding. The accounts receivable is another major part that falls under the category of liquid assets for the companies, and CAE Ryan Jacob believes that there must not be any due negligence to it as well. These assets are calculated by the sum of money that is owed to the company for the services that has been provided by them or goods rendered to other concerns. Inventories are important current assets as well especially to the companies who focus mainly on the manufacturing. Whatever it is, they might be termed as a liquid, but they do claim solid handling to ensure the best operation.