Current vs non-current
The balance sheet splits both assets and liabilities into current (within 12 months) and non-current (longer than 12 months). It's a simple split, but it tells you about liquidity and structure.
Current items
Current assets - things expected to convert to cash within a year:
- Cash and bank balances
- Short-term investments (mutual fund units, fixed deposits maturing in <1 year)
- Trade receivables - money owed by customers
- Inventory - raw materials, work-in-progress, finished goods
- Other current assets - advance to suppliers, prepaid expenses
Current liabilities - things due within a year:
- Trade payables - money owed to suppliers
- Short-term borrowings - working-capital loans, current portion of long-term debt
- Other current liabilities - accrued expenses, customer advances
Non-current items
Non-current assets - things held longer than a year:
- Property, plant, equipment (PPE)
- Intangibles (software, brands, patents)
- Goodwill
- Long-term investments
- Deferred tax assets