2
The phrase “assets” refers to all of a company’s possessions. They are the economic resources that the company employs to boost sales, decrease expenses, or otherwise generate value for its shareholders. Purchasing computers and software for office workers, for instance, can accelerate daily chores and increase productivity.
On a company’s balance sheet, there are two basic classes of assets: current assets and noncurrent assets:
- Assets used to produce income during the current fiscal year
- Long-term assets (sometimes referred to as fixed or capital assets) are employed to generate value beyond the next twelve months.
Examining a company’s assets reveals to analysts and investors the assets that, in the opinion of management, will generate the highest value.
