The groupings of current assets, long-term investments, property, plant, equipment, and intangible assets all fall under the category of assets on a balance sheet. This grouping of data can be used to determine future success or failure within a business.
Current assets are assets that are going to be converted to cash or used up by the end of the year. Two categories that exist within current assets are accounts receivable and supplies. Accounts receivable is an asset that is going to be converted to cash through collection within a year from the issue of the financial statement, and supplies are assets that are going to be used up by the company within a year.
Long term assets are assets in stocks and bonds that are held by the company which will be held for many years. Along with stocks and bonds long term assets can also include land and buildings that are not currently being used by the company for operating activities.
The assets of Property, plant, and equipment are assets that are currently being used for operating activities by the company. Companies generally depreciate the total cost of new property, buildings, and equipment over a number of years. This depreciation is subtracted from the total cost of the asset. This allows a company to report only a portion of the assets cost over the entire reporting period.
Intangible assets are assets of a company that are not physical entities of the company but are very important to the operating activities. These intangible assets can include trademarks, copyrights, or patents that are specific to the company.
All this data can be used to determine were the company is going to go in the future. If you take current assets within the company and compare it to previous years you can see an increase or decrease in accounts receivable and supplies. If accounts receivable is increasing that means that this asset can be converted into more cash or vice versa. The asset of supplies can be used to...