Differences Between Current Assets And Quick Assets / Liquid Assets

Current Assets VS Quick Assets

Current Assets are the resources of the business which provides probable future economic benefits to the business within one year while Quick Assets or Liquid Assets are also current assets but among all of the current assets, these are more liquid in nature i.e., these are convertible into cash very easily and very quickly. Examples of quick assets include Cash, Cash Equivalents and Accounts Receivable.

The formula used for the calculation of current assets is shown below:

Current Assets = Total Assets - Fixed Assets

The formula used for computation of Quick Assets is:

Quick Assets = Cash + Cash Equivalents + Accounts Receivable + Short-Term Investments - Closing Stock + Prepaid Expenses

Current assets are utilized in meeting daily expenses and to work smoothly and for the running of daily business operations, usually quick assets are utilized i.e., cash & cash equivalents and accounts receivable are used. For example, for purchasing goods, cash is utilized so that the business has enough stock to sell to customers on time.