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Current Asset

Current assets are assets expected to be used or sold within one year or one business cycle, whichever is longer. They include cash, accounts receivable, inventory, and short-term investments. On the balance sheet, assets are classified as either current or long-term. The current ratio, calculated by dividing total current assets by total current liabilities, indicates a company's liquidity or ability to meet short-term obligations. Investment involves allocating money or capital for profitable returns through interest, income, or asset appreciation. It relates to saving or delaying consumption and occurs across households, firms, and governments through vehicles like property, stocks, bonds, or foreign assets. Investment carries risk of losing the principal amount and

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Current Asset

Current assets are assets expected to be used or sold within one year or one business cycle, whichever is longer. They include cash, accounts receivable, inventory, and short-term investments. On the balance sheet, assets are classified as either current or long-term. The current ratio, calculated by dividing total current assets by total current liabilities, indicates a company's liquidity or ability to meet short-term obligations. Investment involves allocating money or capital for profitable returns through interest, income, or asset appreciation. It relates to saving or delaying consumption and occurs across households, firms, and governments through vehicles like property, stocks, bonds, or foreign assets. Investment carries risk of losing the principal amount and

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sunny_gupta00
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© Attribution Non-Commercial (BY-NC)
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Current asset

In accounting, a current asset is an asset on the balance sheet which is expected


to be sold or otherwise used up in the near future, usually within one year, or one
business cycle - whichever is longer. Typical current assets include cash, cash
equivalents, accounts receivable, inventory, the portion of prepaid accounts
which will be used within a year, and short-term investments.

On the balance sheet, assets will typically be classified into current assets and
long-term assets.

The current ratio is calculated by dividing total current assets by total current
liabilities. It is frequently used as an indicator of a company's liquidity, its ability to
meet short-term obligations.

Investment
Investment is the investing of money or capital in order to gain profitable returns,
as interest, income, or appreciation in value. It is related to saving or deferring
consumption. Investment is involved in many areas of the economy, such as
business management and finance no matter for households, firms, or
governments. An investment involves the choice by an individual or an
organization such as a pension fund, after some analysis or thought, to place or
lend money in a vehicle, instrument or asset, such as property, commodity, stock,
bond, financial derivatives (e.g. futures or options), or the foreign asset
denominated in foreign currency, that has certain level of risk and provides the
possibility of generating returns over a period of time.

Investment comes with the risk of the loss of the principal sum. The investment
that has not been thoroughly analyzed can be highly risky with respect to the
investment owner because the possibility of losing money is not within the
owner's control. The difference between speculation and investment can be
subtle. It depends on the investment owner's mind whether the purpose is for
lending the resource to someone else for economic purpose or not.
In the case of investment, rather than store the good produced or its money
equivalent, the investor chooses to use that good either to create a durable
consumer or producer good, or to lend the original saved good to another in
exchange for either interest or a share of the profits. In the first case, the
individual creates durable consumer goods, hoping the services from the good
will make his life better. In the second, the individual becomes an entrepreneur
using the resource to produce goods and services for others in the hope of a
profitable sale. The third case describes a lender, and the fourth describes an
investor in a share of the business. In each case, the consumer obtains a durable
asset or investment, and accounts for that asset by recording an equivalent
liability. As time passes, and both prices and interest rates change, the value of
the asset and liability also change.

An asset is usually purchased, or equivalently a deposit is made in a bank, in


hopes of getting a future return or interest from it. The word originates in the
Latin "vestis", meaning garment, and refers to the act of putting things (money or
other claims to resources) into others' pockets. See Invest. The basic meaning of
the term being an asset held to have some recurring or capital gains. It is an asset
that is expected to give returns without any work on the asset per se. The term
"investment" is used differently in economics and in finance. Economists refer to
a real investment (such as a machine or a house), while financial economists refer
to a financial asset, such as money that is put into a bank or the market, which
may then be used to buy a real asset.

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