What Are 3 Types Of Assets You Should Know About

Assets are valuable resources that a business or individual possesses, and they can take various forms. Here are three examples of assets:

1. Cash and Cash Equivalents: This includes physical currency, as well as highly liquid investments that can be quickly converted into cash, such as certificates of deposit or Treasury bills. These assets provide immediate access to funds for meeting short-term financial obligations.

2. Accounts Receivable (AR): AR represents the money owed to a business by its customers for goods or services that have been provided on credit. It signifies future incoming cash flows and is an essential component of a company’s working capital.

3. Marketable Securities: Marketable securities are investments that can be easily bought or sold in the financial markets. Examples include stocks and bonds. These assets can appreciate in value over time or generate regular income through dividends and interest payments.

Additional examples of assets include tangible assets like buildings, trademarks, patents, product designs, and distribution rights. These assets contribute to a company’s overall value and can be used strategically to generate revenue or secure financing for growth and expansion. It’s important to manage and track these assets effectively to make informed financial decisions. [Updated as of July 6, 2022]

Fixed assets, often denoted as property, plant, and equipment (PPE), encompass a vital category of assets that businesses rely on for their long-term operations. These assets are typically divided into three main types:

1. Property: This category includes physical properties or land owned by a company. For instance, a frozen cookie dough manufacturer may own a corporate office as part of their property assets.

2. Plant: The term “plant” refers to the facilities where production or operational activities take place. In the context of the cookie dough manufacturer, their plant assets would comprise the cookie dough factory, which serves as the central hub for manufacturing.

3. Equipment: Equipment encompasses the machinery and tools necessary for the production process. In the case of the cookie dough manufacturer, equipment assets would involve the machines responsible for making cookie dough.

These fixed assets are essential for the company’s day-to-day operations and are considered long-term investments. They provide the infrastructure and tools needed for the company to generate revenue and carry out its core activities effectively. Understanding these three types of fixed assets is crucial for businesses to manage their assets efficiently and make informed financial decisions.

• Cash and cash equivalents.
• Accounts receivable (AR)
• Marketable securities.
• Trademarks.
• Patents.
• Product designs.
• Distribution rights.
• Buildings.