By The assets of an enterprise are its property complex, which allows it to carry out production activities and make a profit. About what assets are, their structure and composition, we will tell in the article. You will also learn about the financial analysis of lyxor asset managment, methods for managing and optimizing their structure, and how to evaluate the effectiveness of their use.
Enterprise assets: concept, management principle
The company’s assets are property resources that it owns and uses in production activities, for profit and business development. They may not have a material form, they may be presented in the form of cash on a current account or in the form of some object.
Important! Starting from January 2022, companies will have a PPA – the right to use an asset. These are assets that the company has leased and uses to make a profit. They do not belong to the company by right of ownership, but they bring income to it.
Asset management is relevant for any company. Therefore, it is carried out on an ongoing basis.
In this case, the assets must meet the following requirements:
Participate directly or indirectly in the main activities of the company and generate profit (income).
Have a valuation.
To belong to the company on the right of ownership (in the case of leased assets – on the right of use).
The company can exercise control and management of assets.
Who is in control?
Large companies with a network of branches and representative offices, as a rule, manage assets through a specially created structural unit.
Medium and small businesses do not have the production capacity to organize a separate asset management body. It is acceptable for them to assign management functions to the accounting department, which, in turn, can distribute control over certain types of assets to other departments.
Composition and structure of assets
The resources of the company are different: they are distinguished by the form, scope, turnover, as well as the sources of their receipt and formation of value. There are several classifications of assets in terms of their importance to the company.
Assets in accounting
This classification implies the distribution of assets into two groups according to how they are reflected in the balance sheet – current and non-current. Circulating assets are not used in production for more than one year or one operating cycle if it exceeds a calendar year. During one cycle they are processed completely. They are considered the most liquid and are presented in the form of materials, stocks. This also includes cash.
Non-current – used for a long period, transferring its value to the cost of production in parts, gradually. These are fixed assets in the form of buildings, equipment, transport, intangible assets.
Asset shape
The following classification implies division into groups according to form.
Material assets have a material form, they can be touched, measured. For example, manufactured finished products, office or warehouse space.
Intangible assets are represented as the results of intellectual work, other developments, computer programs, logos, etc.
Financial assets are cash and cash equivalents that are actually a means of payment.
Liquidity principle
In economics, it is customary to divide the company’s assets into 4 groups according to the degree of liquidity.
Absolutely liquid – money on current and foreign currency accounts, cash on hand. First of all, they act as a means of settlement with counter parties.
Highly liquid – those that are converted into cash without losing their market value and in the shortest possible time – up to 1 month. For example, short-term financial investments, short-term receivables.
Liquid – with a maturity of up to 6 months. They can be cashed out quickly enough to be able to repay their obligations, but there is a risk of losing their value (depreciation).
Illiquid (or liquid) assets – have a long sale period. Represented by fixed assets and intangible assets of the company.
