Current assets is when you own something and it can be paid back in less than a year.
Current liabilities is what you owe to someone that has to paid back in less than a year.
dependencies between current assets and current liabilities either through balance creations or balance changes.
Current liabilities to total assets ratio is the comparison between total assets in business with current liabilities in business.
Solvency. A company is considered solvent if it's current assets exceed it's current liabilities. A company is considered to be insolvent if their current liabilities exceed their current assets.
The ratio between current assets to current liability is called "Current Ratio".
Basic Accounting Equation: Assets = Liabilities + Owner's Equity Assets = Current Assets + Fixed Assets Liabilities = Current Liabilities + Long-term liabilities So Assets = Liabilities + Owner's Equity then current assets + fixed assets = current liabilities + long-term liabilities + owner's equity 2230 + 9900 = 1380 + 4040 + owner's equity 2230+9900 - 1380 - 4040 = owner's equity 6710 = owner's equity
Liquidity
Current assets = total assets - long term assets Current assets = 1903000 - 894410 Current assets = 1008590 Current ratio = 1.6 Current ratio formula = Current asset / Current liabilities 1.6 = 1008590 / Current liabilities Current liabilities = 1008590 / 1.6 Current liability = 630369
Formula for net current assets :net current assets = current assets - current liabilities
the two ratios that measure liquidity is acid test and current ratio. the acid test ratio is current assets- stock/ current liabilities the current ratio is current assets/ current liabilities
it is the difference between current assets and current liabilities which is the working capital gap
The format of the Balance Sheet is Assets = Liabilities + Equity * Current Assets * Fixed Assets * -------------------- * Total Assets * Current Liabilities * Long Term Liabilities * -------------------------- * Total Liabilities * Equity * Net Income * ---------------------------- * Total Equity * -------------------------- * Total Liabilities and Equity
the difference between total current assets and total liability is the working capital. It goes with a formula 'current asset -current liability =working capital '