Vocabulary

Study the following vocabulary.

Assets and liabilities

assets – general term for the things a company owns that have value or earning potential

current assets – a company's cash or other items (stocks and investments, goods, etc) that can easily be turned into cash

fixed assets – other items of value owned by a company which are not easily convertible into cash, for example equipment, machinery, buildings and land

intangible assets – things which have value but cannot be directly seen, felt or measured, for example reputation or brand awareness and image

depreciation – the loss of value in fixed assets over time (computers, cars, etc)

book value – the worth of a business according to the account books, as compared with its actual market value

market value – the amount something, for example a fixed asset, could be sold for on the open market

current liabilities – debts that must be paid within a year

long-term liabilities – debts payable in more than a year, for example bank loans

balance sheet – a company's record of its assets and liabilities as of the end of a given financial period