The total value of assets on the balance sheet is the sum of all the company’s assets. Assets are anything of value that the company owns, such as cash, inventory, property, equipment, and intangible assets.
The total value of assets is equal to the total value of liabilities and equity.
Formula for calculating total assets is:
- Total assets = Current assets + Non-current assets
- Current assets encompass assets that can be readily transformed into cash within a span of one year.
- These include cash itself, along with accounts receivable and inventory..
- Non-current assets are assets that cannot be converted into cash within one year, such as property, equipment, and intangible assets.
The total value of asset is an important metric for assessing a company’s financial health. A company with a high total asset value is generally considered to be more financially stable than a company with a low total asset value.
Here are some examples of assets that can be found on a balance sheet:
- Cash
- Accounts receivable
- Inventory
- Prepaid expenses
- Property, plant, and equipment
- Intangible assets (such as patents, trademarks, and goodwill)
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