Definition:

Current assets is a balance sheet category which can also be known as current accounts or liquid assets. It includes things like cash, short-term investments, inventory and accounts receivable that we can access or use within a year.

Example:

You sold a product, and the customer pays you $500 which you expect to receive from the credit card provider within 3 days. This amount (in accounts receivable on the balance sheet) is a current asset.

Why it matters:

Current assets show the value of things that will be available to pay bills in the short term.

You should monitor your forecast for both current assets and current liabilities to ensure that your liabilities don’t become difficult to pay from the assets you already have available (otherwise additional external funding will be needed)