Posts Tagged ‘asset’

Cash is a Necessity and Not a Luxury

Some companies think they are financially strong because they have lots of assets. But the makeup of those assets makes a big difference. What do I mean by that?

Can You Spend It

I touched on this earlier in the posting Read the rest of this entry »


Real Assets

Can you identify real assets when you see them? This question may not be what you are thinking. This posting relates to a similar one called When an Asset is Not an Asset.

Aren’t All Assets Real?

Stop for a moment and consider some of the things categorized as assets on the balance sheets of various companies. These may include, among other items: Cash and Short-Term Investments, Accounts and Notes Receivable, Prepaid Expenses, Fixed Assets (Land and Buildings, Furniture and Equipment, Leasehold Improvements, etc.), Long-Term Investments, Patents, Goodwill, and other items.

Now, on the face of it there is really nothing wrong with Read the rest of this entry »


Unplanned Obsolescence

We’re all familiar with the concept of planned obsolescence, but what about unplanned obsolescence. Planned obsolescence is when a product is designed to have only a limited life because it becomes outdated due to loss of functionality, appearance, customer appeal, or perhaps simply wears out. In general, planned obsolescence is somewhat intentional, the idea being that customers will either have to or desire to replace a product when is becomes obsolete. Read the rest of this entry »


The Liquidity Trap

Sometimes financial calculations are not what they at first seem. That is, we may not be able to take them at face value. I previously discussed a little about what financial analysis can do for you in Things Financial Analysis Can Tell You. In that post two things mentioned were the current ratio and the quick ratio. Let’s look at these a little closer. To do this we’ll use Read the rest of this entry »


When an Asset is Not an Asset

When is an asset not an asset? Let’s start out with some basics before we get into the meat of this article.

Asset Defined

According to one of the definitions of an asset is an item of value owned or item(s) on a balance sheet showing the book value of property owned. For accounting purposes this is a good working definition. It would include such things as cash, receivables, inventory, land and building, equipment, and pre-paid expenses. There are other things that can be classified as an asset, but this list does not need to be all inclusive for the purpose of this blog.

How Are Assets Used?

Assets are used to Read the rest of this entry »


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