What are "current" assets and liabilities?

[jdenhaan]

I've been reading into annual reports and am finding it difficult to understand what's the difference between 'current' and 'non current' assets and liabilities. Can anybody explain in layman's terms what these mean? I've been plugging the values into a spreadsheet, but I ran into an annual report (ASX:CGF, report here, page 67 for the financial position) which doesn't break the assets and liabilities down.

About time I figured out what I'm actually entering into my fundamentals valuation spreadsheet!

 

[Whiskers]

I've been reading into annual reports and am finding it difficult to understand what's the difference between 'current' and 'non current' assets and liabilities. Can anybody explain in layman's terms what these mean? I've been plugging the values into a spreadsheet, but I ran into an annual report (ASX:CGF, report here, page 67 for the financial position) which doesn't break the assets and liabilities down.

About time I figured out what I'm actually entering into my fundamentals valuation spreadsheet!

Basically current assets are assets that are intended to be used within a year such as cash, receivables (money owed) and whatever can be quickly and easily converted to cash such as inventory.

Non current assets are long term assets such as property, plant, shares in other companies, goodwill etc.

 

[McLovin]

I've been reading into annual reports and am finding it difficult to understand what's the difference between 'current' and 'non current' assets and liabilities. Can anybody explain in layman's terms what these mean? I've been plugging the values into a spreadsheet, but I ran into an annual report (ASX:CGF, report here, page 67 for the financial position) which doesn't break the assets and liabilities down.

About time I figured out what I'm actually entering into my fundamentals valuation spreadsheet!

"Current" is really just short for "due in the current period". You can think of it as the assets and liabilities that will be realised in the next 12 months. It also applied to assets that are highly liquid like cash, shares, bonds etc. The underlying principle is to give the user an understanding of the liquidity of the company in the immediate future, ie what they will have to pay out and what they can expect to recieve.

To answer your second question, financial companies (Banks/life assurance/insurance) don't usually delineate between current and non-current on the balance sheet but if you read the notes it should be in there.

You're really diving in the deep end if you're trying to understand CGF's accounts, or any financials' accounts. They're much trickier than regular companies.

 

[waimate01]

http://bit.ly/1dvmcre

 

[jdenhaan]

http://bit.ly/1dvmcre

Yeah, let's post that smug reply to every question.

I'm looking for an easy layman's explanation. If I had found my answer on Google, I wouldn't be asking.

Not very constructive.

 

[waimate01]

Yeah, let's post that smug reply to every question.

I'm looking for an easy layman's explanation. If I had found my answer on Google, I wouldn't be asking.

Not very constructive.

If you did the Google search and clicked on the VERY first link and read the VERY first paragraph, you would see the following:

"A balance sheet account that represents the value of all assets that are reasonably expected to be converted into cash within one year in the normal course of business. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash."

Which is pretty much identical to the reply McLovin and Whiskers so kindly donated some of their valuable time to provide to you.