Examples of Assets in the following topics:
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- The return on assets ratio (ROA) measures how effectively assets are being used for generating profit.
- The return on assets ratio (ROA) is found by dividing net income by total assets.
- Asset turnover is sales divided by total assets.
- Second, the total assets are based on the carrying value of the assets, not the market value.
- The return on assets ratio is net income divided by total assets.
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- Total asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.
- Companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover.
- Total assets turnover = Net sales revenue / Average total assets
- Tangible assets contain various subclasses, including current assets and fixed assets.
- Current assets include inventory, while fixed assets include such items as buildings and equipment.
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- Fixed-asset turnover is the ratio of sales to value of fixed assets, indicating how well the business uses fixed assets to generate sales.
- Fixed assets, also known as a non-current asset or as property, plant, and equipment (PP&E), is a term used in accounting for assets and property that cannot easily be converted into cash.
- This can be compared with current assets, such as cash or bank accounts, which are described as liquid assets.
- Fixed asset turnover = Net sales / Average net fixed assets
- Fixed-asset turnover indicates how well the business is using its fixed assets to generate sales.
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- The debt ratio is expressed as Total debt / Total assets.
- It is the ratio of total debt (the sum of current liabilities and long-term liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as 'goodwill').
- Total liabilities divided by total assets.
- The debt/asset ratio shows the proportion of a company's assets which are financed through debt.
- If the ratio is less than 0.5, most of the company's assets are financed through equity.
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- Assets on a balance sheet are classified into current assets and non-current assets.
- Assets are on the left side of a balance sheet.
- On the left side of a balance sheet, assets will typically be classified into current assets and non-current (long-term) assets.
- Cash and cash equivalents are the most liquid assets found within the asset portion of a company's balance sheet.
- This can be compared with current assets such as cash or bank accounts, which are described as liquid assets.
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- Fixed assets, also known as a non-current asset or as property, plant, and equipment (PP&E), is an accounting term for assets and property.
- Unlike current assets such as cash accounts receivable, PP&E are not very liquid.
- PP&E are often considered fixed assets: they are expected to have relatively long life, and are not easily changed into another asset .
- For example, an asset worth $100,000 in year 1 may have a depreciation expense of $10,000, so it appears as an asset worth $90,000 in year 2.
- Examples of intangible assets include copyrights, patents, and trademarks.
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- Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with the matching principle).
- Any business or income producing activity using tangible assets incurs costs related to those assets.
- The costs are allocated in a rational and systematic manner as a depreciation expense to each period in which the asset is used, beginning when the asset is placed in service.
- the expected salvage value, also known as residual value of the asset
- The cost of an asset so allocated is the difference between the amount paid for the asset and the salvage value.
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- The balance sheet relationship is expressed as; Assets = Liabilities + Equity.
- The balance sheet contains statements of assets, liabilities, and shareholders' equity.
- Assets have value because a business can use or exchange them to produce the services or products of the business.
- Generally, sales growth, whether rapid or slow, dictates a larger asset base - higher levels of inventory, receivables, and fixed assets (plant, property, and equipment).
- Differentiate between the three balance sheet accounts of asset, liability and shareholder's equity
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- Book value is the price paid for a particular asset, while market value is the price at which you could presently sell the same asset.
- For assets, the value is based on the original cost of the asset less any depreciation, amortization, or impairment costs made against the asset.
- Assets such as buildings, land, and equipment are valued based on their acquisition cost, which includes the actual cash price of the asset plus certain costs tied to the purchase of the asset, such as broker fees.
- Historical cost is typically the purchase price of the asset or the sum of certain costs expended to put the asset into use.
- Certain assets are disclosed at lower of cost or market in order to conform to accounting's conservatism principle, which stresses that assets should never be overstated.
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- Depreciation refers to the allocation of the cost of assets to periods in which the assets are used.
- Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation) and the allocation of the cost of assets to periods in which the assets are used (depreciation with the matching principle).
- Methods of computing depreciation may vary by asset for the same business.
- Generally this involves four criteria: cost of the asset, expected salvage value (residual value of the asset), estimated useful life of the asset, and a method of apportioning the cost over such life.
- This may be a more realistic reflection of an asset's actual expected benefit from the use of the asset: many assets are most useful when they are new.