Current assets
In one sentenceAssets expected to be turned into cash or used up within a year or within the operating cycle, such as cash, accounts receivable and inventory.
Simply put
Current assets are the “money that circulates” in the business: goods are bought, then sold, then their price is collected, then new goods are bought.
They matter because they are the source for paying short-term liabilities, and they are used to calculate the current ratio and working capital.
Worked example
A wholesale food store on the date the statements are prepared.
Cash30,000 SAR
Accounts receivable from customers70,000 SAR
Inventory100,000 SAR
Total current assets (30,000 + 70,000 + 100,000)200,000 SAR
Don't confuse it with
Non-current assetsThey stay in the business for more than a year to be used, not sold, such as equipment and buildings.