Current Assets

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 all Cash 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

Example

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