Current Assets

Explanation: Current Assets refer to assets that a company expects to convert into cash or use up within a year or during its normal business cycle, whichever is longer. These assets are crucial for a company’s day-to-day operations and are typically detailed on its balance sheet. Examples of current assets include cash, cash equivalents, accounts receivable (money owed by customers), inventory (goods ready for sale or production), and prepaid expenses.

These assets play a vital role in ensuring the smooth functioning of a business. They provide the necessary liquidity to meet short-term obligations, finance ongoing operations, and capitalize on growth opportunities. Monitoring current assets allows a company to gauge its liquidity, effectively manage its working capital, and maintain financial stability.

Example: As of FY23, TCS had total current assets worth 1,10,270 crore. This figure represents the total value of assets that TCS expects to convert into cash or use up within the next year. It includes items such as cash on hand, amounts due from customers (accounts receivable), inventory of goods held for sale, and prepaid expenses for services that will be used within the next year.

You can view the complete breakdown of Current Assets for any company on Radar in the Balance Sheet section.