Permanent Current Asset

AAA

DEFINITION of 'Permanent Current Asset'

The minimum amount of current assets a company needs to continue operations. Permanent current assets are current assets that are always replaced with like assets within one year. Inventory, depreciating assets, cash and accounts receivable are examples of this. These are the amount of current assets for the company to exist.

INVESTOPEDIA EXPLAINS 'Permanent Current Asset'

There are temporary and permanent current assets. A temporary current asset is a sudden increase in the accounts receivable and inventory due to a sudden increase in sales, such as with a fluctuating asset. A company growing over time has three types of assets: fixed assets, permanent current assets and fluctuating current assets. Fixed assets are long term. Fluctuating current assets are seasonal and occur when sales increase or decrease. Permanent current assets are always financed long-term similar to fixed assets.



RELATED TERMS
  1. Accounts Receivable - AR

    Money owed by customers (individuals or corporations) to another ...
  2. Cash

    Legal tender or coins that can be used in exchange goods, debt, ...
  3. Current Assets

    1. A balance sheet account that represents the value of all assets ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses ...
  5. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  6. Inherent Risk

    The risk posed by an error or omission in a financial statement ...
Related Articles
  1. Warning Signs Of A Company In Trouble
    Professionals

    Warning Signs Of A Company In Trouble

  2. 5 Things To Know About Asset Allocation
    Investing Basics

    5 Things To Know About Asset Allocation

  3. Understanding Capital And Financial ...
    Bonds & Fixed Income

    Understanding Capital And Financial ...

  4. How To Analyze A Company's Financial ...
    Markets

    How To Analyze A Company's Financial ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center