What role is played by the company's assets in the formation of the company's profit

Personal property of the company, which is represented in tangible, monetary or intangible terms, is called an asset. Depending on the sources of formation, such facilities have different liquidity. Net assets are those purchased at the expense of equity, and for the acquisition of gross assets, borrowed funds are usually used.

What role does the company's assets play?

The material assets include the fixed assets of the enterprise, buildings for various purposes, equipment for the production line, supplies and raw materials. These objects have a material form and participate in the formation of the cost of goods due to depreciation charges and a full write-off.

The company's monetary assets are current assets that are in the personal possession of the firm. This kind of values can include the contents of bank accounts, cash, securities and even receivables. Quite often, companies have the right to certain patents, trademarks or logos. Such intellectual property belongs to the category of intangible assets.

Non-current and current assets of the company

If we consider the degree of participation of material values in the production process, then we can divide all assets into two groups: negotiable and non-negotiable.

• Such objects, which in the course of economic activity are completely spent for the production of certain goods or services, are called negotiable. The value of assets plays a direct role in the formation of prime cost.
• Values involved in several production cycles by partially transferring their value to the commodity are called non-negotiable.

Separation of assets depending on sources of formation and degree of liquidity

Assets of the company can be formed on the basis of own and borrowed funds. Values purchased for their money are called net assets, and objects purchased with the help of borrowed funds are generally considered gross. In terms of liquidity, assets can also be different. Objects that are able to quickly turn into money are the most liquid and are of great value in terms of making a profit.

According to the rules of the economy, assets are distributed in proportion to the financial significance from a larger to a smaller value. For example, in the first articles, cash is reflected, followed by receivables and inventories, and the latter includes future expenses and long-lived fixed assets.

This grouping is quite relevant for determining the company's financial stability in a difficult economic situation. When bankruptcy of an enterprise, assets must fully cover the arrears. In addition, when examining a loan application, banks carefully analyze the company's profitability and solvency.

Trying to deal with the question of what assets are, the first thing to remember is the following: whatever the material values, they must be converted into cash as efficiently as possible. Newly acquired assets can be invested in further business development, aimed at implementing new projects and improving working conditions.

What are the benefits of intangible assets

Let's try to understand what are assets, called non-material assets. Until recently, such a concept did not exist at all in the terminology of Russian business. With the manifestation of innovative technologies and software products, such term as intangible assets of the company has become quite often used in the formation of the cost of goods. The contingent value of intellectual property was allocated to depreciable values. When conducting business in the sphere of trade and rendering services, such concepts as know-how, copyrights, goodwill, acquired the status of values that characterize the overall financial condition of the company.

For the professional management of all the resources of an enterprise, it is necessary to know quite well the mechanism for converting a company's assets into cash. Correct regulation will help to bring the company the maximum profit and avoid undesirable bankruptcy.