Active Asset

AAA

DEFINITION of 'Active Asset'

An asset that is used by a business in its daily or routine operations. Active assets can be tangible, such as buildings or equipment, or intangible, such as patents or copyrights. Active assets are listed as assets on the business's balance sheet.

INVESTOPEDIA EXPLAINS 'Active Asset'

Businesses depend on active assets in order to function on a daily basis. Active assets stand in contrast to passive assets, which may not be needed by the business at a given time in order to operate. Active assets should also not be confused with active asset allocation, which is a type of investment strategy.

RELATED TERMS
  1. Anticipated Holding Period

    The time period for which a limited partnership expects to hold ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  4. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
RELATED FAQS
  1. What is the difference between fundamental and technical analysis?

    These terms refer to two different stock-picking methodologies used for researching and forecasting the future growth trends ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Understanding Capital And Financial Accounts In The Balance Of Payments

    The current, capital and financial accounts compose a nation's balance of payments.
  2. Markets

    Intangible Assets Provide Real Value To Stocks

    Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value.
  3. Options & Futures

    Financial Concepts

    Diversification? Optimal portfolio theory? Read this tutorial and these and other financial concepts will be made clear.
  4. Markets

    Introduction To Fundamental Analysis

    Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
  5. Bonds & Fixed Income

    How to Diversify with Muni Bond ETFs

    Thinking of diversifying with bonds? Consider these muni bond ETFs.
  6. Mutual Funds & ETFs

    How To Build A Bond Ladder?

    Bond laddering is a strategy used when building a portfolio: an investor can spread out interest rate risk and create a stream of cash flows for income.
  7. Fundamental Analysis

    How Investment Risk Is Quantified

    FInancial advisors and wealth management firms use a variety of tools based in Modern portfolio theory to quantify investment risk.
  8. Investing

    Rethinking About Retirement Investing?

    There are plenty of reasons to rethink your retirement investing, wherever you fall on the spectrum between fatalistic acceptance and cheerful confidence.
  9. Investing Basics

    Here's How To Tap International Markets

    Access to foreign markets has grown a lot in recent years, allowing US market players to trade these bourses in real-time.
  10. Investing

    What's a Run Rate?

    Run rate is a term used to denote annualized earnings extrapolated from a shorter time frame. Management uses the run rate to estimate future revenues.

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center