Current asset
For current assets (English: Current Assets) of a company, the assets that are to be implemented as part of the business process, the inventory changes frequently so through acquisitions and disposals. You are only a short time in the company and do not serve as fixed assets, permanent business operations. Current assets can be partly financed with short-term borrowings and trade credits and need not be fully applied by the long-term investors.
Assignment
Current assets is determined by its purpose. After the indirect definition of § 247 HGB, it is the sum of the values of those assets of a company that are not intended to permanently remain in the company. Thus, it is consequently the assets that are processed in the context of production ( See also: WIP ). Objects, therefore, which should go through the operation processes of procurement, production and sales are associated with it. From procured materials are through the production -process, the products sold are for claims against the customer and the payment of money at the box office or on the bank account. In principle, the receivables from deliveries and services are counted as current assets.
The decision as to what is intended to achieve an object which asset type and it is thus attributable meets the company's management. A self-produced machine that is to be sold is expected to be current assets. They remain permanently in operation, it is an asset.
Somewhat different is the definition of "Current Assets" in accordance with U.S. GAAP, under which only assets are attributed to be consumed which is converted within the normal business cycle in money, that is sold or. If the business cycle is shorter than one year, the year is assumed. Similarly, it is defined in the International Financial Reporting Standards, with a right to vote remains at all to distinguish between fixed and current assets.
Structure
In the balance sheet, current assets is disclosed in accordance with § 266 HGB para 2 B on the asset side, and as mentioned below to be divided. In advance of the balance sheet was prepared an inventory of inventories is necessary.
I. Stocks / inventories
II Receivables and other assets
Are shown separately for all four points receivables and assets with a remaining maturity of more than one year
III. securities
IV Cash and cash equivalents
The current assets in the balance sheet analysis
For the determination of meaningful metrics to assess the net assets, financial position and performance of an enterprise, the structure of the German Commercial Code is only conditionally suitable. Be subject to different definitions are used in the balance sheet analysis and set current assets with the values of the liabilities side, so the funding sources in relationship.
Working Capital
Working capital is the excess of the liquidated quickly (within one year ) a company's assets over the current liabilities. It is the part of current assets, which is not bound to cover short-term liabilities, and therefore can work in procurement, production and sales process. Working capital also represents a measure of liquidity ( liquidity especially third degree) of the company, because it measures the overhang of long-term funds on the part of the fixed assets that are convertible into cash within one year.
Working capital also indicates the unutilized long-term financing volume, as can be seen in the extent to which parts of the short releasable current assets are financed in the medium to long term. Thus, this is an indication of the expansion force of the company, because the working capital fund is a long-term financed assets is that can be liquidated within one year. This maneuver could therefore be used to finance long-term capital needs.
Net Working Capital
Net working capital (English net working capital ) to determine the net funding requirement to finance short-term assets allowed; It is defined as the capital that generates revenue for a company without incurring capital costs in the narrower sense. It is calculated as current assets minus cash and cash equivalents less liabilities for goods and services. A negative net working capital means that suppliers to pre-finance transactions.
Net financial assets
Net financial assets = financial assets ( Cash Receivables ) - Current liabilities ( payables, etc.)