current assets

current assets- assets that are intended for use within a short period of time (up to 12 months).

Current assets include: Stocks, Accounts receivable, Financial investments, Cash and cash equivalents, etc.

Current assets are also called "current assets".

The term "current assets" in English is current assets.

All assets in accounting are divided into current and non-current. Normative documents do not define the meaning of these terms, but define the list of assets that are included in them. From the list of non-current assets, we can conclude that non-current assets include assets intended for use for a long time, i.e. useful life, lasting more than 12 months or normal operating cycle, if it exceeds 12 months. All other assets are current assets.

to current assets, for example, include: Inventories, Accounts Receivable, Financial Investments, Cash and Cash Equivalents, etc.

The division into these two categories of property is important from an economic point of view. Thus, current assets can be quickly converted into cash. The greater the share of current assets, the higher the liquidity of the organization.

Current assets in the balance sheet

The division of the organization's assets into current and non-current is reflected in the balance sheet. So, the left side of the balance sheet, called the Asset, reflects all the assets owned by the organization. The asset consists of two sections "Non-current assets" and "Current assets".

Name of indicator	The code
ASSETS I. Non-current assets
Intangible assets	1110
Research and development results	1120
Intangible search assets	1130
Tangible Exploration Assets	1140
fixed assets	1150
Profitable investments in material values	1160
Financial investments	1170
Deferred tax assets	1180
Other noncurrent assets	1190
Total for Section I	1100
II. current assets
	1210
Value added tax on acquired valuables	1220
Accounts receivable	1230
Financial investments (excluding cash equivalents)	1240
Cash and cash equivalents	1250
Other current assets	1260
Total for Section II	1200
	1600

Current assets include:

1) Stocks

Stocks - assets in the form of raw materials and materials, goods for sale, etc.

2) Value added tax on acquired valuables

Value Added Tax on Acquired Valuables - value added tax accepted for accounting on acquired valuables, which is deductible upon the occurrence of additional conditions.

3) Accounts receivable

Accounts receivable - the debt of debtors (debtors) to the organization (creditor).

4) Financial investments

Financial investments (with the exception of cash equivalents) are state and municipal securities, securities of other organizations, etc., the maturity (maturity) of which does not exceed 12 months.

5) Cash and cash equivalents

Cash means cash on hand and demand deposits.

Cash equivalents are highly liquid financial investments that can be easily converted into a known amount of cash and are subject to an insignificant risk of changes in value.

6) Other current assets

Such current assets may include, for example, missing or damaged material assets, in respect of which a decision has not been made to write them off as part of production costs (sales expenses) or to guilty persons (shown in the debit of account 94 “Deficiencies and losses from damage to valuables).

Financial analysis of current assets

Own working capital

For financial analysis use the indicator Own working capital.

Own working capital (Working capital) - the difference between the organization's current assets and its short-term liabilities.

The SOS indicator is used to assess the ability of an enterprise to pay off short-term obligations by realizing all its current assets. The more own working capital of the organization, the more financially stable it is. A negative SOS indicates potential financial risks for the organization.

Current liquidity ratio

The current liquidity ratio is the percentage of the organization's short-term assets to its short-term liabilities.

The current liquidity ratio characterizes the extent to which current assets cover short-term liabilities. The recommended value for this ratio is 200%. In this case, the company can cover all of its short-term liabilities and will have liquid funds to carry out its activities.

Current assets in law

Article 656 of the Civil Code of Russia, which governs the Enterprise Lease Agreement, specifies the categories of property related to working capital:

“Under a lease agreement for an enterprise as a whole as a property complex used for entrepreneurial activities, the lessor undertakes to provide the lessee for a fee for temporary possession and use of land plots, buildings, structures, equipment and other fixed assets included in the enterprise, to transfer in the manner, to conditions and within the limits determined by the contract, stocks of raw materials, fuel, materials and other current assets, the rights to use land, water bodies and other natural resources, buildings, structures and equipment, other property rights of the lessor associated with the enterprise, the rights to designations that individualize the activities of the enterprise, and other exclusive rights, as well as to assign to him the rights of claim and transfer to him debts related to the enterprise.

Non-current assets include:

1) Intangible assets

Intangible Assets - exclusive rights to Intellectual Property Objects (computer programs, databases, trademarks, etc.) recorded in accounting.

2) Research and development results

Results of research and development - the organization's costs for research, development and technological work that gave a positive result, but are not related to intangible assets.

3) Intangible Exploration Assets

Intangible prospecting assets - used in the process of prospecting, evaluation of mineral deposits and exploration of minerals, exploration costs that do not have a material form.

4) Tangible exploration assets

Tangible prospecting assets - used in the process of prospecting, evaluation of mineral deposits and exploration of minerals, exploration costs that have a material form: a) structures (pipeline system, etc.); b) equipment (specialized drilling rigs, pumping units, reservoirs, etc.); c) vehicles.

5) Fixed assets

The fixed asset is a long-term labor instrument (more than 12 months). Fixed assets include buildings, machinery and equipment, structures and transmission devices, vehicles.

6) Profitable investments in material values

Profitable investments in material assets are fixed assets intended exclusively for provision by an organization for a fee for temporary possession and use or for temporary use in order to generate income.

7) Financial investment

Financial investments - state and municipal securities, securities of other organizations, etc., the maturity (maturity) of which exceeds 12 months.

8) Deferred tax assets

Deferred tax asset is that part of deferred income tax that should lead to a decrease in income tax payable to the budget in the next reporting period or in subsequent reporting periods.

9) Other non-current assets

Additionally

inventories

To replenish working capital

Illiquid assets are assets that cannot be quickly and cost-effectively converted into cash.

Liquid assets are assets that can be quickly and cost-effectively converted into cash.

Cash occupy an insignificant share in the structure of current assets. Over the year, their value and share decreased, which indicates a rather low level of absolute liquidity of assets.

In the process of analysis, it was revealed that own sources were not enough to form reserves, and the need for them was fully covered by short-term borrowed funds.

Current assets are...

Basically, tangible current assets were covered by attracting accounts payable and short-term loans, which indicates a high financial risk. Among the attracted sources of financing, debts to suppliers and the budget for taxes and fees prevail.

Go to page: 123 4 56789

Asset classification

The assets of the company include the value of the resources that provide the production process of the enterprise. Assets include:

Non-current assets (structures, buildings, machinery and equipment, transport, etc.),
Working capital (cash, debts of debtors, short-term investment of funds, etc.).

Asset accounting is mandatory for most Russian enterprises. All assets are concentrated on the left side of the balance sheet and are divided according to their purpose:

The first section of the balance sheet is represented by non-current assets (fixed assets and intangible assets), which are accounted for in accordance with the residual value minus depreciation (line 1100 of the balance sheet);
The second section of the balance sheet is represented by working capital, which are directly involved in the production process (line 1200 of the balance sheet).

The formula for the average annual value of assets on the balance sheet

To calculate the average amount of assets of the enterprise for the year, it is necessary to add the value of assets at the beginning and end of the year. This sum is then divided by 2 or multiplied by 0.5.

The formula for the average annual value of assets on the balance sheet uses accounting data.

In general, the formula for the average annual value of assets on the balance sheet is as follows:

SA cf = (SAnp + SAkp) / 2

Here CA av is the average annual value of assets,

SANP - the value of assets at the beginning of the period,

SAkp - the value of assets at the end of the period (year).

The formula for the average annual value of assets on the balance sheet allows you to calculate both the assets of the enterprise as a whole and separately for current and non-current assets.

Calculation features

The total assets of the enterprise are recorded in line 1600 of the balance sheet, which is compiled by accountants at the end of each year. Using this formula, balance sheet indicators for several years are used, while the indicator for line 1600 is taken from the balance sheet for each year, summed up and subsequently divided by 2.

In the case of settlements on current assets, the formula for the average annual value of assets on the balance sheet will require information from line 1200 of the balance sheet. If it is necessary to calculate non-current assets, then the accountant uses the indicators for line 1100 of the balance sheet.

current assets

You need to use indicators in a similar way by finding the average value of assets and comparing balance sheet data for the corresponding years.

The value of the average annual value of assets on the balance sheet

The average annual value of assets, which is calculated by analysts, is used in the future when calculating coefficients that can characterize the state and efficiency of any enterprise:

return on assets,
Asset turnover ratio, etc.

Also, the indicator is used in order to find the reasons that led to changes in the operation of the enterprise, and to make decisions in the field of resource management.

Average annual value of assets can give a more accurate understanding of the size and value of assets, while it levels out circumstances that could distort the real amount of assets.

If the indicators of asset turnover of different enterprises for different years are compared, then it is necessary to check the uniformity of the assessment of the average annual amount of assets.

Examples of problem solving

Composition and structure of current assets

Under the structure of working capital is understood the ratio of individual elements in their entirety.

Knowledge and analysis of the structure of working capital in the enterprise are very important, since it to a certain extent characterizes the financial condition at one time or another of the enterprise. For example, an excessive increase in the share of receivables, finished products in stock, work in progress indicates a deterioration in the financial condition of the enterprise. Accounts receivable characterizes the diversion of funds from the turnover of this enterprise and their use by Debtors, debtors in their turnover. An increase in the share of work in progress, finished products in the warehouse indicates the diversion of working capital from circulation, a decrease in sales, and therefore profits. All this indicates that the enterprise needs to manage working capital in order to optimize their structure and increase their turnover.

Since new material values (new value) are created in the production process, the structure of working capital (and, consequently, the efficiency of their use) will be the more favorable, the larger their share serves the production sector, i.e. the greater the share in the total amount of working capital is occupied by working capital.

The structure of working capital at the enterprise is unstable and changes in dynamics under the influence of many reasons.

1. Specifics of the enterprise. In enterprises with long

the production cycle (for example, in shipbuilding) has a large share of work in progress; mining enterprises have a large share of deferred expenses. At those enterprises in which the production process is fleeting, as a rule, there is a large proportion of inventories;

2. Quality of finished products. If the enterprise produces low-quality products that are not in demand among buyers, then the share of finished products in warehouses increases sharply;

3. The level of concentration, specialization, cooperation, and combination of production;

4. Acceleration of scientific and technological progress. This factor affects the structure of working capital in many ways and practically on the ratio of all elements.

Tip 1: The difference between current and non-current assets

If an enterprise introduces fuel-saving equipment and technology, non-waste production, then this immediately affects the reduction in the share of inventories in the structure of working capital.

An important indicator of the structure of working capital is the ratio between the funds invested in the sphere of production and in the sphere of circulation. From the correct distribution of the total amount of working capital between the sphere of production and the sphere of circulation, their normal functioning, the speed of turnover and the completeness of their inherent functions: production and payment and settlement (Figure 1) largely depend.

Figure 1 - The structure of current assets of the enterprise

Thus, according to the economic content, current assets can be classified into:

— circulating production assets;

- circulation funds.

The division of working capital into working capital and circulation funds is due to the presence of two spheres of individual circulation of funds: the sphere of production and the sphere of circulation. Reflecting the peculiarities of their sphere of application, revolving funds and circulation funds are interconnected and interdependent.

Therefore, the increase in the efficiency of the use of working capital is achieved by better use of both working capital and circulation funds. The composition of working capital is understood as a set of elements that form working capital assets and circulation funds.

Elements of working capital are: raw materials, basic materials and purchased semi-finished products; auxiliary materials; fuel and fuel; container and container materials; repair parts; tools, household inventory and other wearing items; work in progress and semi-finished products of own production; future spending; finished products; goods shipped; cash; debtors; others.

By place and role in the process of reproduction, working capital is divided into the following four groups:

- funds invested in inventories;

- funds invested in work in progress and deferred expenses;

- funds invested in finished products;

— cash and funds in settlements.

According to the degree of planning, working capital is divided into standardized and non-standardized. Non-standardized goods include goods shipped, cash and funds in settlements. All other elements of working capital are subject to rationing.

According to the sources of formation, working capital is divided into own (and equated to them) and borrowed.

The presence of own and borrowed funds in the turnover of the enterprise is explained by the peculiarities of the organization of the production process. A constant minimum amount of funds to finance the needs of production is provided by own funds. Temporary need for funds arising under the influence of reasons dependent and independent of the enterprise is covered by a loan and other borrowed sources.

The main directions of increasing the efficiency of the use of working capital

The increase in the share of current assets in the property of the enterprise positively characterizes its structure and indicates the rationality of investing assets.

In the composition of working capital, the largest share of more than 50% is occupied by inventories, and over the year it increased by 2%. This is due to the specifics of production, which requires the creation of large stocks, as well as a fairly long production cycle. Among the stocks, the share of raw materials and materials is high, which increased over the year despite a decrease in their amount by 5272 thousand rubles.

The value of finished products increased over the year by 4272 thousand rubles, and the share by 1%. This indicates the stability of sales and demand for products and their high quality.

Accounts receivable increased significantly both in terms of amount and specific weight. All receivables of the analyzed enterprise were short-term and basically - these are debts of buyers. On the negative side, at the beginning of the year, overdue accounts receivable amounted to 57.5% of the total, but at the end of the year it decreased and amounted to 9.2% of the total. This indicates that buyers do not comply with financial and settlement discipline.

Cash occupy an insignificant share in the structure of current assets.

The difference between current assets and non-current assets

Over the year, their value and share decreased, which indicates a rather low level of absolute liquidity of assets.

In general, working capital decreased by 26448 thousand rubles, which negatively characterizes the state of financial resources. During the year, the structure of working capital deteriorated, and is not rational enough from the point of view of the financial position of the enterprise, since the largest share is occupied by low liquid assets - stocks and receivables, which are overdue.

An important area of analysis is the study of own and borrowed sources of financing of current assets.

For the formation of working capital, OAO NK Rosneft-Dagneft attracted: own working capital, short-term credits and loans, accounts payable.

The analyzed enterprise has its own sources for the formation of working capital, and their value for the year increased by 16076 thousand rubles, it is positively estimated that this happened mainly due to an increase in the company's own capital.

In general, the provision of OAO NK Rosneft-Dagneft with its own sources for current activities is quite high, which positively characterizes the financial stability of the enterprise.

In the process of analysis, it was revealed that own sources were not enough to form reserves, and the need for them was fully covered by short-term borrowed funds. Basically, tangible current assets were covered by attracting accounts payable and short-term loans, which indicates a high financial risk. Among the attracted sources of financing, debts to suppliers and the budget for taxes and fees prevail.

To assess the effectiveness of the use of working capital, their turnover is analyzed. The acceleration of the turnover of funds means a decrease in the need for material and financial resources, helps to reduce production costs, and ultimately allows you to increase the return on funds and profitability of production.

Go to page: 123 4 56789

Other articles

Formation of the financial result of the enterprise LLC Zarya
One of the main requirements for the functioning of enterprises in a market economy is the break-even of economic activity, the reimbursement of expenses by their own income and the provision of a certain amount of profitability, profitability of management. The main task of predp…

The result of the activity of any enterprise largely depends on the rational allocation of current assets and their effective use.

Current assets (working capital) are placed in section II of the balance sheet of the enterprise. When analyzing current assets, first of all, it is necessary to assess their composition and structure. Current assets (current assets) are placed either in the sphere of production or in the sphere of circulation. Current assets that are involved in production are called tangible assets. These include inventory assets:

— raw materials, materials and other similar values;

- low-value and fast-wearing items;

- costs in work in progress;

- finished products and goods for resale;

- shipped goods;

- future spending;

— other stocks and expenses.

Current assets that participate in the sphere of circulation are called monetary assets. These assets include:

1. Net monetary assets:

- settlement accounts;

- currency accounts.

2. Short-term financial investments.

3. Accounts receivable of the enterprise.

Stable, well-established production, respectively, has a stable structure of current assets. Significant changes are undesirable. One of the most negative reasons for the unstable structure of the company's current assets is inflation. Inflation acts like a tax, and more devastating than a tax imposed by legislation.

Inflation always leads to a decrease in the real value of current assets, profit from sales, demand for capital. In the context of inflation, the uncertainty and risk of the activities of any

enterprises, increasing dependence on external sources of financing. The most important condition for mitigating the negative consequences of the impact of inflation on the financial position of the enterprise is the correct distribution of assets and liabilities of the enterprise. Investments in monetary assets will contribute to the loss of purchasing power, while the growth of monetary liabilities will contribute to its increase. This is due to the fact that in conditions of inflation, it is profitable to borrow money.

The analyst needs to evaluate the sources of financing of current assets. The higher the company's long-term loans and fixed-interest loans, the better it is protected from losses in purchasing power.

First of all, it is advisable to give a general assessment of changes in the composition and structure of current assets. To do this, we will build the following table;

Table 3.3.1 Analysis of the composition and structure of current

current) assets

After a general analysis of the composition and structure of current assets, it is advisable to analyze changes in the composition of tangible current assets.

On this day, the following table is calculated.

Table 1.3.2 Analysis of tangible current assets

The causes and consequences of changes in the structure of tangible current assets may be different.

An increase in the share of inventories may be the result of the accumulation of illiquid assets, the deliberate accumulation associated with interruptions in supply, etc. The consequence of this situation may be the loss of consumer properties of products, the decline of the yen, losses. A decrease in the share of investments in work in progress and inventories can lead to interruptions in the production process, to underloading of production capacities, a drop in production and sales volumes, and losses.

Only optimal production stocks can ensure an uninterrupted production process.

The diversion of the enterprise's funds into excess stocks leads to a violation of the financial stability of the enterprise, withdraws financial resources from circulation. The growth of finished product balances at the end of the analyzed period also needs to be checked, identifying the reasons for such growth. The reasons for the increase in the balance of finished products include:

- non-rhythmic production;

— inconsistency in transportation of finished products;

- loss of competitiveness of finished products due to low quality, high prices, etc.

The consequence of this situation will be a lack of funds for

current account of the enterprise, the need to obtain additional loans, unreasonable growth in accounts payable, losses.

Topic 1.4. Analysis of the cash current assets of the enterprise

Cash current assets of the enterprise are the most mobile in the composition of all total assets.

Despite the fact that all monetary assets participate in the sphere of circulation and carry the function of money, they are different in form. If the cash desk, current account, foreign currency account are a form of cash (net cash), then receivables are in the form of money in transit. Short-term financial investments are money invested in securities. Based on the various forms of funds, the analysis, first of all, reveals the composition and structure of monetary assets.

Table 3.4.1.

Dialysis of the composition and structure of the company's monetary assets

The change in the structure of cash can be due to many reasons. If the company has a tendency to increase accounts receivable, it is necessary to assess its quality, reliability.

The increase in the share of short-term financial investments should correspond to the increase in profits; it is necessary to compare the percentage of income from securities with the profitability of a bank deposit.

Net cash is analyzed by movement in various activities of the enterprise. For analysis, the inflow and outflow of funds for various types of activities of the enterprise are calculated.

Table 3.4.2 Evaluation of the movement of net

enterprise cash

Cash inflow (inflow)	Cash outflow
1. Current activity Sales revenue. Advances given to "customers" ("buyer"), etc.	I. Current activities Payments to suppliers and contractors, salary payments. Contributions to social funds. Insurance and security. Mandatory payments to the budget. Payments related to current business activities.
TOTAL	TOTAL
2. Investment activity. Revenue from the sale of fixed assets. Special-purpose financing.	2. Investment activity. Acquisition of fixed assets. Capital construction. Composition and structure of current assets of the enterprise
TOTAL	TOTAL
3. Financial activity. Received credits, loans, loans.	3. Financial activity. Return of received credits, loans, loans
TOTAL	TOTAL
TOTAL	TOTAL

After such an analysis, it is possible to determine for which type of activity the enterprise has the largest cash inflow and for which - the largest cash outflow.

Analyzing the cash flow of the enterprise, it is advisable to check the excess and shortage of cash in the enterprise.

The lack of cash will lead to a delay in mandatory payments to the budget, settlements with suppliers, delay in payment of wages, etc. This situation sharply worsens the financial stability of the enterprise.

An excess of cash also negatively affects the financial position of the enterprise, as the money supply depreciates in the face of inflation.

To assess the excess or shortage of cash, the amount of cash is compared with the amount of urgent payments of the enterprise (payment due in the current month).

Surplus (deficit) = cash desk + p / account + currency account / amount of urgent payments of the enterprise

Cash security = cash desk + r / account + currency account / amount of urgent payments

⇐ Previous30313233343536373839Next ⇒

Studopedia.org - Studopedia.Org - 2014-2018. (0.003 s) ...

current assets

Current assets include:

Financial analysis of current assets

Non-current assets include:

Additionally

Current assets are...

Other articles

Asset classification

The formula for the average annual value of assets on the balance sheet

Calculation features

current assets

The value of the average annual value of assets on the balance sheet

Examples of problem solving

Composition and structure of current assets

Tip 1: The difference between current and non-current assets

The main directions of increasing the efficiency of the use of working capital

The difference between current assets and non-current assets

Other articles

Composition and structure of current assets of the enterprise

More on the topic of the article: