Current Assets

Current assets are assets that can be converted into cash in a short amount of time, usually a period of less than one year. This includes assets such as cash and accounts receivable. Accounts receivable can often be converted into cash fairly quickly and this means that they can be used when analyzing a company's liquidity. Other examples of current assets include:

• Inventory (if it can be liquidated quickly)
• Marketable Securities
• Prepaid Expenses

Current assets are important because they are the assets that can often be liquidated if a business fails. This is why they lenders and creditors are often interested in a company's current assets levels and ratios.