Learn more about Financial Manager business summary data
Learn how to analyze financial statements
In the Financial Manager, current assets are the cash and other accounts that will be converted into cash within a year. The relationship between current assets and current liabilities shows the ability of the business to pay off its debt during the normal course of operations.
The calculation for current assets is
Cash + Accounts Receivable + Inventory + Other Current Assets
where:
Cash = the sum of allCash account types
Accounts Receivable = the sum of all Accounts Receivable account types
Inventory = the sum of all Inventory account types
Other Current Assets = the sum all Other Current Assets account types
If cash is $25,000, accounts receivable is $40,000, inventory is $20,000, and other current assets are $30,000, then current assets are $115,000.
The calculation for this example is
$25000 + $40000 + $20000 + $30000 = $115000