The Lords Insurance Blog

Making Insurance

Term of the Day

From our insurance terms section, this is the definition:

Quick Assets – Assets that are quickly convertible into cash.”

For example, accounts receivable, marketable securities; or current assets minus inventory.

An examples of quick assets, for household budgets, are bank accounts with active balances,  jewelery, or expensive electronics can be very easily and quickly sold on the open market. Unfortunately your autographed photo of Fabio Lanzoni does not count as a quick asset.

For businesses, there are many assets that can be considered a quick asset. Some examples are raw material inventories, finished goods inventories, & accounts receivables.

Quick Assets can be conveniently used to settle necessary and unavoidable expenses that have a deadline. It serves as a source to manage everyday debt obligations and could be a life saver in emergency situations. For example, you take a loan and lose your job. You can’t find another job and it’s getting harder and harder to maintain bills and meet your debt obligations. This is where quick assets come in. You can sell whatever it is you have and use the money to pay your bills and obligations until you can find another job.

To see if you have any quick assets, take a look at a website like Craig’s List or eBay to see if any of the junk you have lying around could be considered a quick asset! You’ll be surprised to find that maybe that autographed photo of Fabio Lanzoni might be worth a quick buck after all!

 

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Written by lordsinsurancelog

December 10, 2010 at 8:55 pm