In accounting, a current asset is an asset that can reasonably be expected to be sold, consumed, or exhausted through the normal operations of a business within the current fiscal year, operating cycle, or financial year.
Current assets include cash, cash equivalents, short-term investments in companies in the process of being sold, accounts receivable, stock inventory, supplies, and the prepaid liabilities that will be paid within a year.
[1] Such assets are expected to be realised in cash or consumed during the normal operating cycle of the business.
[3] It is frequently used as an indicator of a company's accounting liquidity, which is its ability to meet short-term obligations.
The quick ratio, or acid-test ratio, measures the ability of a company to use its near-cash or quick assets to extinguish or retire its current liabilities immediately.