QUICK ASSETS Meaning and
Definition
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Quick assets, also known as liquid assets or current assets, refer to a company's assets that can be easily converted into cash within a short period of time, usually within a year. These assets are essential in assessing a company's liquidity, as they allow the business to meet its immediate financial obligations promptly.
The main types of quick assets include cash and cash equivalents, which are readily available funds in the form of cash or highly liquid investments like treasury bills or short-term government bonds. Additionally, marketable securities such as stocks and bonds that can be easily sold on the market are considered quick assets.
Accounts receivable, the amount of money that customers owe to the company for goods or services on credit, are also included in quick assets. However, these may have a slightly lower liquidity than cash or marketable securities, as it takes time to collect the outstanding funds.
Inventory can also be classified as a quick asset if it can be sold quickly at its book value or market price. However, some inventories, such as raw materials or long-term projects, may not be considered quick assets.
Quick assets are vital for businesses to maintain their financial stability and meet short-term obligations, such as paying off creditors or covering operational expenses during a cash crunch. By calculating the ratio of quick assets to current liabilities, known as the quick ratio, investors and analysts can assess a company's ability to fulfill its immediate financial obligations and evaluate its overall liquidity position.
Common Misspellings for QUICK ASSETS
- 1uick assets
- 2uick assets
- wuick assets
- auick assets
- qyick assets
- qhick assets
- qjick assets
- qiick assets
- q8ick assets
- q7ick assets
- quuck assets
- qujck assets
- qukck assets
- quock assets
- qu9ck assets
- qu8ck assets
- quixk assets
- quivk assets
- quifk assets
- quidk assets
Etymology of QUICK ASSETS
The term "quick assets" comes from the combination of the word "quick" and the word "assets". Each word has its own etymology:
1. Quick: The word "quick" originated from the Old English word "cwic", meaning "alive" or "living". Over time, it evolved to mean "fast" or "rapid". The term "quick assets" utilizes this meaning, referring to assets that can be easily converted into cash.
2. Assets: The word "assets" has its root in the Latin word "assessus", which means "estimated" or "valued". It entered Middle English from the Old French word "assez", meaning "enough" or "sufficient". Eventually, "assets" came to signify anything of value, either tangible or intangible, that an individual or entity owns.
