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Tangible assets are physical assets like land, vehicles, equipment, and inventory that companies use to operate but do not sell to customers. They are classified as either current assets that can be converted to cash within a year, like inventory, or fixed assets needed to continuously run the business, such as machinery. Intangible assets are nonphysical assets like patents, trademarks, and copyrights that contribute to a company's future value. Both tangible and intangible assets are recorded on a company's balance sheet to determine financial ratios and assess the company's worth for loans or investments.

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40 views1 page

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Tangible assets are physical assets like land, vehicles, equipment, and inventory that companies use to operate but do not sell to customers. They are classified as either current assets that can be converted to cash within a year, like inventory, or fixed assets needed to continuously run the business, such as machinery. Intangible assets are nonphysical assets like patents, trademarks, and copyrights that contribute to a company's future value. Both tangible and intangible assets are recorded on a company's balance sheet to determine financial ratios and assess the company's worth for loans or investments.

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coeh
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© © All Rights Reserved
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o Tangible assets are physical assets such as land, vehicles,

equipment, machinery, furniture, inventory, stock, bonds and cash.


These assets are the backbone of a company that keep it in
production but are not available to customers. Tangible assets are at
risk of damage either from naturally occurring incidents, theft or
accidents.
The two types of tangible assets are current and fixed. Current
assets are inventory, or items a company turns into cash usually by
the end of the year. These assets can be used as liquidation to save
a company from debt problems or as financial aid. Fixed assets are
physical items that will not be sold at any point in the business.
These assets include machinery, equipment, vehicles or land, and
they are needed to run the business continually.
Intangible assets are nonphysical, such as patents, trademarks,
franchises, goodwill and copyrights. Depending on the type of
business, intangible assets may include Internet domain names,
performance events, licensing agreements, service contracts,
computer software, blueprints, manuscripts, joint ventures, medical
records, permits and trade secrets. Intangible assets add to a
company's possible future worth and can be much more valuable
than its tangible assets.
Both tangible and intangible assets are recorded on a balance sheet.
A balance sheet outlines a company's balance of income and
spending over time to determine its debt to earnings (D/E) ratio. The
balance sheet allows a company to consider future expansion and
gives banks, investors and vendors the ability to decide a
company's worth for possible loans or credits.

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