Custom Search

Balance Sheet for the Argon Mining Company.


1. List what you think the Argon Mining Company's tangible assets would include.

a. Fixed assets :

          Its plants, machinery, equipment, land etc.

b. Current assets:

          Its debtors, cash, stock, prepayments, short term marketable securities etc.

2. Why do you think company does not use some of the money it has in the bank to pay off some of its creditors?

a. Interest must not be paid on creditors, no reason to pay them.

b. It can make other things with that money, where it will earn some more money.

c. Firm has to have cash, e.g. because it might need to repair some of its equipment very quickly.

d. Cash increases firm's security against uncertain things.

3. What is the purpose of calculating net current assets?

Net current assets are the same as working capital. By comparing the amount of working capital and current liabilities shareholders and firms wanting to give credit can find out how well firm is able to meet current claims. Also firm itself can see whether it is wasting money by keeping it under working capital or not.

Click here to see more economics,politics and school papers from me