Cash Asset Ratio

Finance, a la shmoop. What is a current asset? Current yeah it's kind of a [Picture of a currant on a plant]

socialist raisin there, you know they all look about alike but that's a [Soldiers marching in front of Stalin with currants for heads]

currant and has nothing to do with current as cur-rent remember it like

your rent comes due soon, you rent a place for a year or less usually or at [Guy sticks his head out of pile of overdue bills]

least that's how long, you know lock in your rental rate. So if your [Someone signing a contract]

asset is current then it can be turned into cash within a year. That's how we

remember it here around Shmoop. Examples? A bond coming due in a year or less. [Bond document]

Companies store their cash all the time in short term paper like certificates of

deposit or Bank CDs which come due in less than a year. that's a current asset. [List of short-term paper]

And companies buy these kinds of bonds so they get a little more interest than

from their banks you know checking account. They buy stocks as well, shares [New interest rate is very small]

of goog can be easily converted into cash quickly. Shares in Google are a [Current asset stamp]

current asset. Ounces of gold, yep easily a current asset. All right you get the

idea, so what's not current well fourteen thousand acres of solar panel land that [Huge fields full of solar panels]

your company owns. If you ever had to sell it while there are very few buyers

and it likely would take more than a year just to figure out all the [Calendars popping up]

regulatory restrictions on selling it. A big old factory well can't sell that on [Red cross appears on a factory]

Amazon or Ebay, definitely not current. Your brand equity

in your corporation like the relationship you've developed with your

consumers, yeah it's another non-current asset you can't exactly go to the bank [Guy going up to the bank and pleading]

and convert brand loyalty to USD. So that's it current assets they live here [Arrow pointing to current assets on a balance sheet]

on this side of the balance sheet way up top in the good view seats high on the [Current assets in a tree]

vine of the tree. So put down those currants, stop ranting about the [Stalin holding a currant]

proletariat and for God's sake just buy some raisins. [Guy pointing to a box of raisins]