What are current assets?
Current assets are balance-sheet assets that the company expects to convert to cash, sell or consume within one year (or one operating cycle, whichever is longer). Typical current assets include cash and cash equivalents, accounts receivable, inventory, prepaid expenses and short-term investments.
Current assets are critical for working-capital and liquidity analysis. The current ratio (Current Assets ÷ Current Liabilities) is a standard solvency metric expected by lenders and investors.