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Simple English definitions for legal terms
quick asset
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A quick definition of quick asset:
A quick asset is something that a person or company owns that has value and can be easily turned into cash. This includes things like money in the bank, inventory, equipment, and accounts receivable. Quick assets are important because they can be used to pay bills or debts quickly if needed. Other types of assets, like property or investments, may take longer to turn into cash and are not considered quick assets.
A more thorough explanation:
A quick asset is an item that is owned and has value. It is readily convertible into cash, such as a marketable security, a note, or an account receivable. Current assets are examples of quick assets, which are expected to be converted to cash, sold, or consumed during the next twelve months. These assets are important for a business to have because they can be used to pay off debts or invest in new opportunities.
For example, a company may have accounts receivable from customers who have not yet paid for their purchases. These accounts receivable are quick assets because they can be converted into cash relatively quickly. Another example of a quick asset is inventory that a company plans to sell in the near future.
Quick assets are important for a company's liquidity, which is its ability to meet short-term obligations. If a company has a lot of quick assets, it is considered to be more liquid and less risky than a company with fewer quick assets.